<PAGE>
Exhibit 4.1
MERRILL LYNCH MORTGAGE INVESTORS, INC.,
Depositor
LASALLE BANK NATIONAL ASSOCIATION
Master Servicer and Securities Administrator
INDYMAC BANK, F.S.B.,
Servicer
WILSHIRE CREDIT CORPORATION,
Servicer
and
CITIBANK, N.A.,
Trustee
----------
POOLING AND SERVICING AGREEMENT
Dated as of September 1, 2006
----------
MERRILL LYNCH MORTGAGE INVESTORS TRUST,
MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2006-HE5
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S>
<C>
ARTICLE I
DEFINITIONS....................................................
11
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND
WARRANTIES.. 60
SECTION 2.01.
Conveyance of Mortgage
Loans........................... 60
SECTION 2.02.
Acceptance by the
Trustee of the Mortgage Loans........ 62
SECTION 2.03.
Representations,
Warranties and Covenants of the
Depositor..............................................
64
SECTION 2.04.
Representations and
Warranties of the Master Servicer;
the Servicers; the Securities Administrator;...........
69
SECTION 2.05.
Substitutions and
Repurchases of Mortgage Loans that
are not "Qualified Mortgages"..........................
73
SECTION 2.06.
Authentication and
Delivery of Certificates............ 73
SECTION 2.07.
REMIC
Elections........................................ 73
SECTION 2.08.
Covenants of the
Servicers............................. 79
SECTION 2.09.
Permitted Activities
of the Trust...................... 79
SECTION 2.10.
Qualifying Special
Purpose Entity...................... 79
SECTION 2.11.
Depositor Notification
of NIM Notes.................... 79
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE
LOANS............... 79
SECTION 3.01.
Servicers to Service
Mortgage Loans.................... 79
SECTION 3.02.
Servicing and
Subservicing; Enforcement of the
Obligations of the Servicers...........................
81
SECTION 3.03.
Rights of the
Depositor, the Securities Administrator,
the Master Servicer and the Trustee in Respect of the
Servicers..............................................
82
SECTION 3.04.
Master Servicer to Act
as Servicer..................... 82
SECTION 3.05.
Collection of Mortgage
Loan Payments; Collection
Accounts; Master Servicer Collection Account;
Certificate Account....................................
83
SECTION 3.06.
Collection of Taxes,
Assessments and Similar Items;
Escrow Accounts........................................
87
SECTION 3.07.
Access to Certain
Documentation and Information
Regarding the Mortgage Loans...........................
88
SECTION 3.08.
Permitted Withdrawals
from the Collection Accounts,
Master Servicer Collection Account and Certificate
Account................................................
88
SECTION 3.09.
[RESERVED].............................................
91
SECTION 3.10.
Maintenance of Hazard
Insurance........................ 91
SECTION 3.11.
Enforcement of
Due-On-Sale Clauses; Assumption
Agreements.............................................
92
SECTION 3.12.
Realization Upon
Defaulted Mortgage Loans;
Determination of Excess Proceeds; Special Loss
Mitigation.............................................
92
</TABLE>
-i-
<PAGE>
TABLE OF CONTENTS
(continued)
<TABLE>
<CAPTION>
PAGE
----
<S>
<C>
SECTION 3.13. Trustee to Cooperate; Release of
Mortgage Files........ 95
SECTION 3.14.
Documents, Records and
Funds in Possession of Servicers
to be Held for the Trustee.............................
97
SECTION 3.15.
Servicing
Compensation................................. 97
SECTION 3.16.
Access to Certain
Documentation........................ 98
SECTION 3.17.
Annual Statement as to
Compliance...................... 98
SECTION 3.18.
Annual Independent
Public Accountants' Servicing
Statement; Financial Statements........................
98
SECTION 3.19.
Rights of the NIMs
Insurer............................. 101
SECTION 3.20.
Periodic
Filings....................................... 102
SECTION 3.21.
Indemnification by
Securities Administrator............ 105
SECTION 3.22.
Indemnification by
Servicers........................... 106
SECTION 3.23.
Prepayment Charge
Reporting Requirements............... 106
SECTION 3.24.
Information to the
Master Servicer..................... 106
SECTION 3.25.
Indemnification........................................
106
SECTION 3.26.
Nonsolicitation........................................
108
SECTION 3.27.
High Cost Mortgage
Loans............................... 108
SECTION 3.28.
Special Servicing
Agreements........................... 109
SECTION 3.29.
Subordination of
Liens................................. 109
ARTICLE IV
DISTRIBUTIONS.................................................
109
SECTION 4.01.
Advances...............................................
109
SECTION 4.02.
Reduction of Servicing
Compensation in Connection with
Prepayment Interest Shortfalls.........................
110
SECTION 4.03.
Distributions on the
REMIC Interests................... 110
SECTION 4.04.
Distributions..........................................
111
SECTION 4.05.
Monthly Statements to
Certificateholders............... 119
ARTICLE V THE
CERTIFICATES...............................................
123
SECTION 5.01.
The
Certificates....................................... 123
SECTION 5.02.
Certificate Register;
Registration of Transfer and
Exchange of Certificates...............................
125
SECTION 5.03.
Mutilated, Destroyed,
Lost or Stolen Certificates...... 129
SECTION 5.04.
Persons Deemed
Owners.................................. 129
SECTION 5.05.
Access to List of
Certificateholders' Names and
Addresses..............................................
129
SECTION 5.06.
Book-Entry
Certificates................................ 130
</TABLE>
-ii-
<PAGE>
TABLE OF CONTENTS
(continued)
<TABLE>
<CAPTION>
PAGE
----
<S>
<C>
SECTION 5.07.
Notices to
Depository.................................. 131
SECTION 5.08.
Definitive
Certificates................................ 131
SECTION 5.09.
Maintenance of Office
or Agency........................ 131
SECTION 5.10.
Authenticating
Agents.................................. 132
ARTICLE VI THE DEPOSITOR, THE MASTER SERVICER, THE SERVICERS AND
THE
SECURITIES ADMINISTRATOR......................................
132
SECTION 6.01.
Respective Liabilities
of the Depositor, the Master
Servicer, the Servicers and the Securities
Administrator..........................................
132
SECTION 6.02.
Merger or
Consolidation of the Depositor, the Master
Servicer, the Servicers or the Securities
Administrator..........................................
133
SECTION 6.03.
Limitation on
Liability of the Depositor, the
Securities Administrator, the Master Servicer, the
Servicers and Others...................................
133
SECTION 6.04.
Limitation on
Resignation of a Servicer................ 134
SECTION 6.05.
Errors and Omissions
Insurance; Fidelity Bonds......... 135
SECTION 6.06.
Limitation on
Resignation of the Master Servicer....... 135
SECTION 6.07.
Assignment of Master
Servicing......................... 136
ARTICLE VII DEFAULT; TERMINATION OF
SERVICER............................. 136
SECTION 7.01.
Events of
Default...................................... 136
SECTION 7.02.
Master Servicer to
Act; Appointment of Successor....... 138
SECTION 7.03.
Notification to
Certificateholders..................... 139
ARTICLE VIII CONCERNING THE TRUSTEE AND THE SECURITIES
ADMINISTRATOR..... 139
SECTION 8.01.
Duties of the Trustee
and the Securities
Administrator..........................................
139
SECTION 8.02.
Certain Matters
Affecting the Trustee and the
Securities Administrator...............................
140
SECTION 8.03.
Trustee and Securities
Administrator Not Liable for
Certificates or Mortgage Loans.........................
142
SECTION 8.04.
Trustee and Securities
Administrator May Own
Certificates...........................................
142
SECTION 8.05.
Trustee's and
Securities Administrator's Fees and
Expenses...............................................
142
SECTION 8.06.
Indemnification and
Expenses of Trustee................ 143
SECTION 8.07.
Eligibility
Requirements for Trustee................... 144
SECTION 8.08.
Resignation and
Removal of Trustee..................... 144
SECTION 8.09.
Successor
Trustee...................................... 145
SECTION 8.10.
Merger or
Consolidation of Trustee..................... 145
SECTION 8.11.
Appointment of
Co-Trustee or Separate Trustee.......... 146
</TABLE>
-iii-
<PAGE>
TABLE OF CONTENTS
(continued)
<TABLE>
<CAPTION>
PAGE
----
<S>
<C>
SECTION 8.12.
Tax
Matters............................................ 147
ARTICLE IX
TERMINATION...................................................
149
SECTION 9.01.
Termination upon
Liquidation or Repurchase of all
Mortgage Loans.........................................
149
SECTION 9.02.
Final Distribution on
the Certificates................. 151
SECTION 9.03.
Additional Termination
Requirements.................... 152
ARTICLE X MISCELLANEOUS
PROVISIONS....................................... 153
SECTION 10.01.
Amendment..............................................
153
SECTION 10.02.
Counterparts...........................................
155
SECTION 10.03.
Governing Law..........................................
155
SECTION 10.04.
Intention of Parties...................................
155
SECTION 10.05.
Notices................................................
156
SECTION 10.06.
Severability of Provisions.............................
157
SECTION 10.07.
Assignment.............................................
157
SECTION 10.08.
Limitation on Rights of Certificateholders.............
158
SECTION 10.09.
Inspection and Audit Rights............................
159
SECTION 10.10.
Certificates Nonassessable and Fully Paid..............
159
SECTION 10.11.
Compliance with Regulation AB..........................
159
SECTION 10.12.
Third Party Rights.....................................
159
SECTION 10.13.
Additional Rights of the NIMs Insurer..................
160
ARTICLE XI ADMINISTRATION AND MASTER SERVICING OF THE MORTGAGE
LOANS.....
160
SECTION 11.01.
Master Servicer........................................
160
SECTION 11.02.
Monitoring of Servicers................................
161
SECTION 11.03.
Fidelity Bond..........................................
162
SECTION 11.04.
Power to Act; Procedures...............................
162
SECTION 11.05.
Documents, Records and Funds in Possession of Master
Servicer to Be Held for Trustee........................
163
SECTION 11.06.
Trustee to Retain Possession of Certain Insurance
Policies and Documents.................................
164
SECTION 11.07.
Compensation for the Master Servicer and the Securities
Administrator..........................................
164
SECTION 11.08.
Annual Statement as to Compliance......................
164
</TABLE>
-iv-
<PAGE>
EXHIBIT A FORMS OF
CERTIFICATES
EXHIBIT B MORTGAGE
LOAN SCHEDULE
EXHIBIT C
[RESERVED]
EXHIBIT D FORM OF
INITIAL CERTIFICATION
EXHIBIT E-1 FORM OF CLASS R
TRANSFEREE'S LETTER AND AFFIDAVIT
EXHIBIT E-2 FORM OF CLASS R
TRANSFEROR'S AFFIDAVIT
EXHIBIT F FORM OF
TRANSFEROR CERTIFICATE
EXHIBIT G FORM OF
INVESTMENT LETTER (ACCREDITED INVESTOR)
EXHIBIT H FORM OF
RULE 144A LETTER (QUALIFIED INSTITUTIONAL BUYER)
EXHIBIT I FORM OF
REQUEST FOR RELEASE
EXHIBIT J
[RESERVED]
EXHIBIT K FORM OF
OFFICER'S CERTIFICATE OF SECURITIES ADMINISTRATOR
EXHIBIT L FORM OF
OFFICER'S CERTIFICATE OF SERVICER
EXHIBIT M-1 FORM OF CLASS A-1 CAP
CONTRACT
EXHIBIT M-2 FORM OF CLASS A-2 CAP
CONTRACT
EXHIBIT M-3 FORM OF SUBORDINATE
CERTIFICATES CAP CONTRACT
EXHIBIT N-1 ONE-MONTH LIBOR CAP
TABLE -- CLASS A-1 CAP CONTRACT
EXHIBIT N-2 ONE-MONTH LIBOR CAP
TABLE -- CLASS A-2 CAP CONTRACT
EXHIBIT N-3 ONE-MONTH LIBOR CAP
TABLE -- SUBORDINATE CERTIFICATES CAP
CONTRACT
EXHIBIT O FORM OF
TRANSFEROR REPRESENTATION LETTER FOR TRANSFER TO
REGULATION S BOOK-ENTRY CERTIFICATE FROM A HOLDER OF A RULE
144A
BOOK-ENTRY CERTIFICATE OR DEFINITIVE CERTIFICATE
EXHIBIT P FORM OF
TRANSFEROR REPRESENTATION LETTER FOR TRANSFER PURSUANT TO
RULE 144A FROM A HOLDER OF A REGULATION S BOOK-ENTRY
CERTIFICATE
OR DEFINITIVE CERTIFICATE
EXHIBIT Q FORM OF
SWAP AGREEMENT
EXHIBIT R FORM OF
ASSESSMENT OF COMPLIANCE
EXHIBIT S SERVICING
CRITERIA TO BE ADDRESSED
EXHIBIT T FORM OF
SARBANES-OXLEY CERTIFICATION
EXHIBIT U FORM OF
ITEM 1123 CERTIFICATION OF SERVICER
SCHEDULE X
SCHEDULE Y
SCHEDULE Z
-v-
<PAGE>
POOLING AND SERVICING AGREEMENT, (the "Agreement") dated as of
September 1,
2006, among MERRILL LYNCH MORTGAGE INVESTORS, INC., a Delaware
corporation, as
depositor (the "Depositor"), LASALLE BANK NATIONAL ASSOCIATION, a
national
banking association, as master servicer (the "Master Servicer") and
securities
administrator (the "Securities Administrator"), INDYMAC BANK,
F.S.B., a national
savings bank, as a servicer ("IndyMac"), WILSHIRE CREDIT
CORPORATION, a Nevada
corporation, as a servicer (("Wilshire") and together with IndyMac,
each a
("Servicer") and together, the ("Servicers")), and CITIBANK, N.A.,
a national
banking association, as trustee (the "Trustee").
The
Depositor is the owner of the Trust Fund that is hereby conveyed to
the
Trustee in return for the Certificates. The Trust Fund for federal
income tax
purposes will consist of (i) three real estate mortgage investment
conduits,
(ii) the right to receive payments distributable to the Class P
Certificates
pursuant to Section 4.04(b)(i) hereof, (iii) each Cap Contract and
the Cap
Contract Account, (iv) the grantor trusts described in Section 2.07
hereof and
(v) the Supplemental Interest Trust, which in turn will hold the
Swap Agreement.
The SWAP REMIC will consist of all of the assets constituting the
Trust Fund
(other than the assets described in clauses (ii), (iii), (iv) and
(v) above,
other than the SWAP REMIC Regular Interests and other than the
Lower Tier REMIC
Regular Interests) and will be evidenced by the SWAP REMIC Regular
Interests
(which will be uncertificated and will represent the "regular
interests" in the
SWAP REMIC) and the Class SWR Interest as the single "residual
interest" in the
SWAP REMIC. The Lower Tier REMIC will consist of SWAP REMIC Regular
Interests
and will be evidenced by the Lower Tier REMIC Regular Interests
(which will be
uncertificated and will represent the "regular interests" in the
Lower Tier
REMIC) and the Class LTR Interest as the single "residual interest"
in the Lower
Tier REMIC. The Trustee will hold the Lower Tier REMIC Regular
Interests. The
Upper Tier REMIC will consist of the Lower Tier REMIC Regular
Interests and will
be evidenced by the REMIC Regular Interests (which will represent
the "regular
interests" in the Upper Tier REMIC) and the Residual Interest as
the single
"residual interest" in the Upper Tier REMIC. The Class R
Certificate will
represent beneficial ownership of the Class SWR Interest, the Class
LTR Interest
and the Residual Interest. The "latest possible maturity date" for
federal
income tax purposes of all interests created hereby will be the
Latest Possible
Maturity Date.
All
covenants and agreements made by the Sponsor in the Sale Agreement
and
by the Depositor and the Trustee herein with respect to the
Mortgage Loans and
the other property constituting the Trust Fund are for the benefit
of the
Holders from time to time of the Certificates and, to the extent
provided
herein, the NIMs Insurer.
THE SWAP REMIC
The following table sets forth the designations, initial principal
balances and
interest rates for each interest in the SWAP REMIC:
<TABLE>
<CAPTION>
Class Initial
Principal Balance Interest Rate
-----
------------------------- -------------
<S>
<C>
<C>
1-SW1
$ 36,062,479.170
(1)
1-SW1A
$ 3,592,195.968
(2)
1-SW1B
$ 3,592,195.968
(3)
1-SW2A
$ 3,888,097.411
(2)
1-SW2B
$ 3,888,097.411
(3)
1-SW3A
$ 4,382,224.467
(2)
</TABLE>
<PAGE>
<TABLE>
<S>
<C>
<C>
1-SW3B
$ 4,382,224.467
(3)
1-SW4A
$ 4,616,407.312
(2)
1-SW4B
$ 4,616,407.312
(3)
1-SW5A
$ 4,466,578.010
(2)
1-SW5B
$ 4,466,578.010
(3)
1-SW6A
$ 4,122,434.512
(2)
1-SW6B
$ 4,122,434.512
(3)
1-SW7A
$ 3,887,739.951
(2)
1-SW7B
$ 3,887,739.951
(3)
1-SW8A
$ 3,628,025.902
(2)
1-SW8B
$ 3,628,025.902
(3)
1-SW9A
$ 3,370,710.032
(2)
1-SW9B
$ 3,370,710.032
(3)
1-SW10A $
3,120,553.464
(2)
1-SW10B $
3,120,553.464
(3)
1-SW11A $
2,914,680.479
(2)
1-SW11B $
2,914,680.479
(3)
1-SW12A $
2,768,529.357
(2)
1-SW12B $
2,768,529.357
(3)
1-SW13A $
2,710,585.575
(2)
1-SW13B $
2,710,585.575
(3)
1-SW14A $
2,762,821.495
(2)
1-SW14B $
2,762,821.495
(3)
1-SW15A $
3,065,704.338
(2)
1-SW15B $
3,065,704.338
(3)
1-SW16A $
3,526,051.400
(2)
1-SW16B $
3,526,051.400
(3)
1-SW17A $
3,669,772.420
(2)
1-SW17B $
3,669,772.420
(3)
1-SW18A $
3,122,128.025
(2)
1-SW18B $
3,122,128.025
(3)
1-SW19A $
2,496,295.751
(2)
1-SW19B $
2,496,295.751
(3)
1-SW20A $
2,063,577.600
(2)
1-SW20B $
2,063,577.600
(3)
1-SW21A $
1,760,710.127
(2)
1-SW21B $
1,760,710.127
(3)
1-SW22A $
989,858.940
(2)
1-SW22B $
989,858.940
(3)
1-SW23A $
481,584.167
(2)
1-SW23B $
481,584.167
(3)
1-SW24A $
1,124,552.482
(2)
1-SW24B $
1,124,552.482
(3)
1-SW25A $
1,113,749.919
(2)
1-SW25B $
1,113,749.919
(3)
1-SW26A $
1,478,648.521
(2)
1-SW26B
$
1,478,648.521
(3)
1-SW27A $
1,428,871.158
(2)
</TABLE>
-2-
<PAGE>
<TABLE>
<S>
<C>
<C>
1-SW27B $
1,428,871.158
(3)
1-SW28A $ 1,283,017.592
(2)
1-SW28B $
1,283,017.592
(3)
1-SW29A $
931,537.361
(2)
1-SW29B $
931,537.361
(3)
1-SW30A $
792,317.429
(2)
1-SW30B $
792,317.429
(3)
1-SW31A $
693,672.317
(2)
1-SW31B $
693,672.317
(3)
1-SW32A $
628,050.343
(2)
1-SW32B $
628,050.343
(3)
1-SW33A $
571,920.112
(2)
1-SW33B $
571,920.112
(3)
1-SW34A $
520,375.073
(2)
1-SW34B $
520,375.073
(3)
1-SW35A $
473,587.768
(2)
1-SW35B $
473,587.768
(3)
1-SW36A $
435,331.358
(2)
1-SW36B $
435,331.358
(3)
1-SW37A $
402,241.300
(2)
1-SW37B $
402,241.300
(3)
1-SW38A $
373,336.250
(2)
1-SW38B $
373,336.250
(3)
1-SW39A $
347,334.948
(2)
1-SW39B $
347,334.948
(3)
1-SW40A $
321,610.629
(2)
1-SW40B $
321,610.629
(3)
1-SW41A $
297,386.067
(2)
1-SW41B $
297,386.067
(3)
1-SW42A $
283,414.361
(2)
1-SW42B $
283,414.361
(3)
1-SW43A $
5,544,740.848
(2)
1-SW43B $
5,544,740.848
(3)
2-SW2
$192,694,640.870
(4)
2-SW1A
$ 19,194,379.532
(5)
2-SW1B
$ 19,194,379.532
(6)
2-SW2A
$ 20,775,486.089
(5)
2-SW2B
$ 20,775,486.089
(6)
2-SW3A
$ 23,415,782.533
(5)
2-SW3B
$ 23,415,782.533
(6)
2-SW4A
$ 24,667,104.688
(5)
2-SW4B
$ 24,667,104.688
(6)
2-SW5A
$ 23,866,513.490
(5)
2-SW5B
$ 23,866,513.490
(6)
2-SW6A
$ 22,027,632.488
(5)
2-SW6B
$ 22,027,632.488
(6)
2-SW7A
$ 20,773,576.049
(5)
2-SW7B
$ 20,773,576.049
(6)
</TABLE>
-3-
<PAGE>
<TABLE>
<S>
<C>
<C>
2-SW8A
$ 19,385,831.598
(5)
2-SW8B
$ 19,385,831.598
(6)
2-SW9A
$ 18,010,901.468
(5)
2-SW9B
$ 18,010,901.468
(6)
2-SW10A $
16,674,226.036
(5)
2-SW10B $
16,674,226.036
(6)
2-SW11A $
15,574,173.521
(5)
2-SW11B $
15,574,173.521
(6)
2-SW12A $
14,793,236.143
(5)
2-SW12B $
14,793,236.143
(6)
2-SW13A $
14,483,621.925
(5)
2-SW13B $
14,483,621.925
(6)
2-SW14A $
14,762,737.005
(5)
2-SW14B $
14,762,737.005
(6)
2-SW15A $
16,381,147.662
(5)
2-SW15B $
16,381,147.662
(6)
2-SW16A
$
18,840,945.600
(5)
2-SW16B $
18,840,945.600
(6)
2-SW17A $
19,608,898.080
(5)
2-SW17B $
19,608,898.080
(6)
2-SW18A $
16,682,639.475
(5)
2-SW18B $
16,682,639.475
(6)
2-SW19A $
13,338,595.249
(5)
2-SW19B $
13,338,595.249
(6)
2-SW20A $
11,026,428.400
(5)
2-SW20B $
11,026,428.400
(6)
2-SW21A $
9,408,099.873
(5)
2-SW21B $
9,408,099.873
(6)
2-SW22A $
5,289,168.060
(5)
2-SW22B $
5,289,168.060
(6)
2-SW23A $
2,573,275.333
(5)
2-SW23B $
2,573,275.333
(6)
2-SW24A $
6,008,883.518
(5)
2-SW24B $
6,008,883.518
(6)
2-SW25A $
5,951,161.581
(5)
2-SW25B $
5,951,161.581
(6)
2-SW26A $
7,900,944.479
(5)
2-SW26B $
7,900,944.479
(6)
2-SW27A $
7,634,966.342
(5)
2-SW27B $
7,634,966.342
(6)
2-SW28A $
6,855,618.908
(5)
2-SW28B $
6,855,618.908
(6)
2-SW29A $
4,977,535.139
(5)
2-SW29B $
4,977,535.139
(6)
2-SW30A $
4,233,633.571
(5)
2-SW30B $
4,233,633.571
(6)
2-SW31A $
3,706,537.683
(5)
2-SW31B $
3,706,537.683
(6)
</TABLE>
-4-
<PAGE>
<TABLE>
<S>
<C>
<C>
2-SW32A $
3,355,896.157
(5)
2-SW32B $
3,355,896.157
(6)
2-SW33A $
3,055,972.388
(5)
2-SW33B $
3,055,972.388
(6)
2-SW34A $
2,780,548.927
(5)
2-SW34B $
2,780,548.927
(6)
2-SW35A $
2,530,547.732
(5)
2-SW35B $
2,530,547.732
(6)
2-SW36A $
2,326,130.142
(5)
2-SW36B $
2,326,130.142
(6)
2-SW37A $
2,149,318.200
(5)
2-SW37B $
2,149,318.200
(6)
2-SW38A $
1,994,868.250
(5)
2-SW38B $
1,994,868.250
(6)
2-SW39A $
1,855,934.052
(5)
2-SW39B $
1,855,934.052
(6)
2-SW40A $
1,718,479.871
(5)
2-SW40B $
1,718,479.871
(6)
2-SW41A $
1,589,039.433
(5)
2-SW41B $
1,589,039.433
(6)
2-SW42A
$ 1,514,383.639
(5)
2-SW42B $
1,514,383.639
(6)
2-SW43A $
29,627,520.652
(5)
2-SW43B $
29,627,520.652
(6)
SWR
(7)
(7)
</TABLE>
(1) The interest rate
on the Class 1-SW1 Interest shall be a per annum rate
equal to the Group One Net WAC.
(2) For any
Distribution Date, the interest rate on each SWAP REMIC Regular
Interest beginning with the designation "1" and ending with the
designation
"A"
shall be a per annum rate equal to 2 times the Group One Net
WAC,
subject to a maximum rate of 2 times the REMIC Swap Rate for
such
Distribution Date.
(3) For any
Distribution Date, the interest rate on each SWAP REMIC Regular
Interest beginning with the designation "1" and ending with the
designation
"B"
shall be a per annum rate equal to the greater of (x) the excess,
if
any,
of (i) 2 times the Group One Net WAC over (ii) 2 times the REMIC
Swap
Rate
for such Distribution Date and (y) 0.00%.
(4) The interest rate
on the Class 2-SW2 Interest shall be a per annum rate
equal to the Group Two Net WAC.
(5) For any
Distribution Date, the interest rate on each SWAP REMIC Regular
Interest beginning with the designation "2" and ending with the
designation
"A"
shall be a per annum rate equal to 2 times the Group Two Net
WAC,
subject to a maximum rate of 2 times the REMIC Swap Rate for
such
Distribution Date.
(6) For any
Distribution Date, the interest rate on each SWAP REMIC Regular
Interest beginning with the designation "2" and ending with the
designation
"B"
shall be a per annum rate equal to the greater of (x) the excess,
if
any,
of (i) 2 times the Group Two Net WAC over (ii) 2 times the REMIC
Swap
Rate
for such Distribution Date and (y) 0.00%.
(7) The Class SWR
Interest shall have no principal amount and shall bear no
interest.
-5-
<PAGE>
THE LOWER TIER REMIC
The following table sets forth the designations, initial principal
balances,
interest rates, Corresponding Classes of Certificates and related
Mortgage Group
for each interest in the Lower Tier REMIC:
<TABLE>
<CAPTION>
Class(es) of
Corresponding
Certificates or Related
Class Initial
Principal Balance Interest Rate
Mortgage Group
-----
------------------------- ------------- -----------------------
<S>
<C>
<C>
<C>
LTA-1
(1)
(8)
A-1, R
LTA-2A
(1)
(8)
A-2A
LTA-2B
(1)
(8)
A-2B
LTA-2C
(1)
(8)
A-2C
LTA-2D
(1)
(8)
A-2D
LTM-1
(1)
(8)
M-1
LTM-2
(1)
(8)
M-2
LTM-3
(1)
(8)
M-3
LTM-4
(1)
(8)
M-4
LTM-5
(1)
(8)
M-5
LTM-6
(1)
(8)
M-6
LTB-1
(1)
(8)
B-1
LTB-2
(1)
(8)
B-2
LTB-3
(1)
(8)
B-3
LTIX
(2)
(8)
N/A
LTII1A
(3)
(8)
Group One
LTII1B
(4)
(9)
Group One
LTII2A
(5)
(8)
Group Two
LTII2B
(6)
(10)
Group Two
LTIIX
(7)
(8)
N/A
LT-IO
(11)
(11)
N/A
LTR
(12)
(12)
N/A
</TABLE>
(1) The initial
principal balance of each of these Lower Tier REMIC Regular
Interests shall equal 1/4 of the initial Certificate Principal
Balance of
its
Corresponding Certificates.
(2) The initial
principal balance of the Class LTIX Interest shall equal the
excess of (i) 50% of the aggregate Cut-off Date Principal Balance
of the
Mortgage Loans over (ii) the initial principal balance of the Lower
Tier
REMIC I Marker Interests.
(3) The initial
principal balance of the Class LTII1A Interest shall equal
0.05% of the excess of (i) the aggregate Cut-off Date Principal
Balance of
the
Group One Mortgage Loans over (ii) the aggregate of the initial
Certificate Principal Balances of Certificate Group One.
(4) The initial
principal balance of the Class LTII1B Interest shall equal
0.05% of the aggregate Cut-off Date Principal Balance of the Group
One
Mortgage Loans.
(5) The initial
principal balance of the Class LTII2A Interest shall equal
0.05% of the excess of (i) the aggregate Cut-off Date Principal
Balance of
the
Group Two Mortgage Loans over (ii) the aggregate of the initial
Certificate Principal Balances of Certificate Group Two.
-6-
<PAGE>
(6) The initial
principal balance of the Class LTII2B Interest shall equal
0.05% of the aggregate Cut-off Date Principal Balance of the Group
Two
Mortgage Loans.
(7) The initial
principal balance of the Class LTIIX Interest shall equal the
excess of (i) 50% of the aggregate Cut-off Date Principal Balance
of the
Mortgage Loans over (ii) the initial principal balance of the Lower
Tier
REMIC II Marker Interests.
(8) For each
Distribution Date, the interest rate for each of the Lower Tier
REMIC Regular Interests (other than the Class LTII1B, the Class
LTII2B and
the
Class LT-IO Interests) shall be a per annum rate (but not less
than
zero) equal to the product of (i) the weighted average of the
interest
rates on the SWAP REMIC Regular Interests for such Distribution
Date and
(ii)
a fraction the numerator of which is 30 and the denominator of
which
is
the actual number of days in the Accrual Period for the LIBOR
Certificates, provided however, that for any Distribution Date on
which the
Class LT-IO Interest is entitled to a portion of interest accruals
on a
SWAP
REMIC Regular Interest ending with a designation "A" as described
in
footnote 11 below, such weighted average shall be computed by
first
subjecting the rate on such SWAP REMIC Regular Interest to a cap
equal to
Swap
LIBOR for such Distribution Date.
(9) For each
Distribution Date, the interest rate for the Class LTII1B
Interest
shall be a per annum rate equal to the product of (i) the weighted
average
of
the interest rates on the SWAP REMIC Regular Interests beginning
with
the
designation "1" for such Distribution Date and (ii) a fraction
the
numerator of which is 30 and the denominator of which is the actual
number
of
days in the Accrual Period for the LIBOR Certificates,
provided,
however, that for any Distribution Date on which the Class LT-IO
Interest
is
entitled to a portion of interest accruals on a SWAP REMIC
Regular
Interest ending with a designation "A" as described in footnote 11
below,
such
weighted average shall be computed by first subjecting the rate
on
such
SWAP REMIC Regular Interest to a cap equal to Swap LIBOR for
such
Distribution Date.
(10) For each Distribution Date, the interest rate for the Class
LTII2B Interest
shall be a per annum rate equal to the product of (i) the weighted
average
of
the interest rates on the SWAP REMIC Regular Interests beginning
with
the
designation "2" for such Distribution Date and (ii) a fraction
the
numerator of which is 30 and the denominator of which is the actual
number
of
days in the Accrual Period for the LIBOR Certificates,
provided,
however, that for any Distribution Date on which the Class LT-IO
Interest
is
entitled to a portion of interest accruals on a SWAP REMIC
Regular
Interest ending with a designation "A" as described in footnote 11
below,
such
weighted average shall be computed by first subjecting the rate
on
such
SWAP REMIC Regular Interest to a cap equal to Swap LIBOR for
such
Distribution Date.
(11) The Class LT-IO Interest is an interest-only class that does
not have a
principal balance. For only those Distribution Dates listed in the
first
column of the table below, the Class LT-IO Interest shall be
entitled to
interest accrued on the SWAP REMIC Regular Interest listed in the
second
column below at a per annum rate equal to the excess, if any, of
(i) the
interest rate for such SWAP REMIC Regular Interest for such
Distribution
Date
over (ii) Swap LIBOR for such Distribution Date.
<TABLE>
<CAPTION>
SWAP REMIC
Distribution Date Regular Interest
----------------- ----------------
<S>
<C>
7
Class 1-SW1A
Class 2-SW1A
7-8
Class 1-SW2A
Class 2-SW2A
7-9
Class 1-SW3A
Class 2-SW3A
7-10
Class 1-SW4A
Class 2-SW4A
7-11
Class 1-SW5A
Class 2-SW5A
7-12
Class 1-SW6A
Class 2-SW6A
</TABLE>
-7-
<PAGE>
<TABLE>
<S>
<C>
7-13
Class 1-SW7A
Class 2-SW7A
7-14
Class 1-SW8A
Class 2-SW8A
7-15
Class 1-SW9A
Class 2-SW9A
7-16
Class 1-SW10A
Class 2-SW10A
7-17
Class 1-SW11A
Class 2-SW11A
7-18
Class 1-SW12A
Class 2-SW12A
7-19
Class 1-SW13A
Class 2-SW13A
7-20
Class 1-SW14A
Class 2-SW14A
7-21
Class 1-SW15A
Class 2-SW15A
7-22
Class 1-SW16A
Class 2-SW16A
7-23
Class 1-SW17A
Class 2-SW17A
7-24
Class 1-SW18A
Class 2-SW18A
7-25
Class 1-SW19A
Class 2-SW19A
7-26
Class 1-SW20A
Class 2-SW20A
7-27
Class 1-SW21A
Class 2-SW21A
7-28
Class 1-SW22A
Class 2-SW22A
7-30
Class 1-SW23A
Class 2-SW23A
7-31
Class 1-SW24A
Class 2-SW24A
7-32
Class 1-SW25A
Class 2-SW25A
7-33
Class 1-SW26A
Class 2-SW26A
7-34
Class 1-SW27A
Class 2-SW27A
7-35
Class 1-SW28A
Class 2-SW28A
7-36
Class 1-SW29A
Class 2-SW29A
7-37
Class 1-SW30A
Class 2-SW30A
7-38
Class 1-SW31A
Class 2-SW31A
7-39
Class 1-SW32A
Class 2-SW32A
7-40
Class 1-SW33A
Class 2-SW33A
7-41
Class 1-SW34A
</TABLE>
-8-
<PAGE>
<TABLE>
<S>
<C>
Class 2-SW34A
7-42
Class 1-SW35A
Class 2-SW35A
7-43
Class 1-SW36A
Class 2-SW36A
7-44
Class 1-SW37A
Class 2-SW37A
7-45
Class 1-SW38A
Class 2-SW38A
7-46
Class 1-SW39A
Class 2-SW39A
7-47
Class 1-SW40A
Class 2-SW40A
7-48
Class 1-SW41A
Class 2-SW41A
7-49
Class 1-SW42A
Class 2-SW42A
7-50
Class 1-SW43A
Class 2-SW43A
</TABLE>
(12) The Class LTR Interest shall have no principal amount and
shall bear no
interest.
UPPER TIER REMIC
The following table sets forth the designation, the initial
principal balances,
the interest rates and Classes of Related Certificates for each of
the interests
in the Upper Tier REMIC.
<TABLE>
<CAPTION>
Initial Principal
Class of
Class
Balance
Rate Related
Certificates
-----
----------------- ---- --------------------
<S>
<C>
<C>
<C>
UTA-1
(1)
(2) A-1
UTA-2A
(1)
(2) A-2A
UTA-2B
(1)
(2) A-2B
UTA-2C
(1)
(2) A-2C
UTA-2D
(1)
(2) A-2D
UTM-1
(1)
(2) M-1
UTM-2
(1)
(2) M-2
UTM-3
(1)
(2) M-3
UTM-4
(1)
(2) M-4
UTM-5
(1)
(2) M-5
UTM-6
(1)
(2) M-6
UTB-1
(1)
(2) B-1
UTB-2
(1)
(2) B-2
UTB-3
(1)
(2) B-3
Uncertificated
Class C Interest
(3)
(3) N/A
UT-IO
(4)
(4) N/A
Residual Interest
(1)
(2) R
</TABLE>
(1) The initial
principal balance of each of these REMIC Regular Interests
shall equal the initial principal balance of its Class of
Related
Certificates.
-9-
<PAGE>
(2) The interest rates
on each of these REMIC Regular Interests shall be an
annual rate equal to the Pass-Through Rate for the Class of
Related
Certificates, provided that in lieu of the applicable Available
Funds Caps
set
forth in the definition of an applicable Pass-Through Rate, the
applicable Upper Tier REMIC Net WAC Cap shall be used.
(3) The Uncertificated
Class C Interest shall have an initial principal balance
equal to the initial
Overcollateralization Amount. The Uncertificated Class
C
Interest shall accrue interest on a notional balance set forth in
the
definition of Class C Current Interest at a rate equal to the Class
C
Distributable Interest Rate. The Uncertificated Class C Interest
shall be
represented by the Class C Certificates.
(4) The Class UT-IO
Interest shall have no principal amount and will not have
an
interest rate, but will be entitled to 100% of the interest accrued
with
respect to the Class LT-IO Interest. The Class UT-IO Interest shall
be
represented by the Class C Certificates.
THE CERTIFICATES
The following table sets forth the Class designation, interest rate
and initial
Class principal amount for each Class of Certificates comprising
interests in
the Trust Fund.
<TABLE>
<CAPTION>
Class Initial
Class Principal Amount Interest Rate
-----
------------------------------ -------------
<S> <C>
<C>
A-1
(1)
(2)
A-2A
(1)
(2)
A-2B
(1)
(2)
A-2C
(1)
(2)
A-2D
(1)
(2)
M-1
(1)
(2)
M-2
(1)
(2)
M-3
(1)
(2)
M-4
(1)
(2)
M-5
(1)
(2)
M-6
(1)
(2)
B-1
(1)
(2)
B-2
(1)
(2)
B-3
(1)
(2)
C
(3)
(3)
P
(4)
(4)
R
(1)
(2)(5)
</TABLE>
(1) Each of these
Classes of Certificates shall have initial principal balances
as
set forth in Section 5.01 hereof.
(2) Each of these
Classes of Certificates shall bear interest at a per annum
rate
equal to the Pass-Through Rate for such Certificates set forth in
the
definitions herein.
(3) For federal income
tax purposes, the Class C Certificate shall represent
(i)
the right to receive all distributions with respect to the
REMIC
Regular Interests represented by the Uncertificated Class C
Interest and
the
Class UT-IO Interest and (ii) certain rights and obligations
with
respect to notional principal contracts as described in Section
2.07.
(4) The Class P
Certificates shall be entitled to the amounts distributable
pursuant to Section 4.04(b) hereof and shall not represent a REMIC
regular
interest.
-10-
<PAGE>
(5) The Class R
Interest represents ownership of the Class SWR Interest, the
Class LTR Interest and the Residual Interest.
In
consideration of the mutual agreements herein contained, the
Depositor,
the Master Servicer, the Securities Administrator, the Servicers
and the Trustee
hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless
the context otherwise requires, shall have the following
meanings:
Accepted Master
Servicing Practices: With respect to any Mortgage Loan, as
applicable, either (x) those customary mortgage master servicing
practices of
prudent master servicing institutions that master service mortgage
loans of the
same type and quality as such Mortgage Loan in the jurisdiction
where the
related Mortgaged Property is located, to the extent applicable to
the Master
Servicer (except in its capacity as successor to a Servicer), or
(y) as provided
in Section 11.01 hereof, but in no event below the standard set
forth in clause
(x) of this definition.
Accepted Servicing Practices: Each Servicer's normal servicing
practices,
which will conform to the mortgage servicing practices of prudent
mortgage
lending institutions that service for their own account mortgage
loans of the
same type as the Mortgage Loans in the jurisdictions in which the
related
Mortgaged Properties are located.
Accountant's Attestation: As defined in Section 3.18.
Accrual Period: With respect to each Class of Class A, Class M and
Class B
Certificates, their Corresponding REMIC Regular Interests and the
Lower Tier
REMIC Interests and any Distribution Date, the period commencing on
the
immediately preceding Distribution Date (or, in the case of the
first
Distribution Date, the Closing Date) and ending on the day
immediately preceding
such Distribution Date and with respect to the SWAP REMIC Regular
Interests and
any Distribution Date, the calendar month immediately preceding the
month in
which such Distribution Date occurs. All calculations of interest
on each Class
of Class A, Class M and Class B Certificates, their Corresponding
REMIC Regular
Interests and the Lower Tier REMIC Interests will be made on the
basis of the
actual number of days elapsed in the related Accrual Period and a
360 day year
and all calculations of interest on the SWAP REMIC Regular
Interests will be
made on the basis of a 360-day year consisting of twelve 30-day
months.
Additional Form 10-D Disclosure: Has the meaning set forth in
Section 3.20.
Adjustable Rate Mortgage Loan: A Mortgage Loan identified in the
Mortgage
Loan Schedule as having a Mortgage Rate that is adjustable.
Adjustment Date: As to each Adjustable Rate Mortgage Loan, each
date on
which the related Mortgage Rate is subject to adjustment, as
provided in the
related Mortgage Note.
Advance: The aggregate of the advances required to be made by each
Servicer
or the Master Servicer, as applicable, with respect to any
Distribution Date
pursuant to Section 4.01, the amount of any such advances being
equal to the sum
of the aggregate amount of all payments of principal and interest
(or, with
respect to the interest-only Mortgage Loans, payments of scheduled
interest)
(net of the Servicing Fee) on the related Mortgage Loans that were
due during
the applicable Due Period and not
-11-
<PAGE>
received as of the close of business on the related Determination
Date, except
as provided in Section 4.01 hereof, less the aggregate amount of
any such
Delinquent payments that the applicable Servicer or Master
Servicer, as
applicable, has determined would constitute a Non-Recoverable
Advance were an
advance to be made with respect thereto; provided, however, that
with respect to
(i) any Mortgage Loan which is not a first lien Mortgage Loan that
is 150 days
delinquent or more (whether or not the Mortgage Loan has been
converted to an
REO Property) (ii) any shortfalls due to bankruptcy proceedings or
the
application of the Relief Act or similar state legislation or
regulations, or
(iii) the principal portion of any amount paid on a Balloon Loan,
there will be
no obligation to make advances and, provided further, however, that
with respect
to any Mortgage Loan that has been converted to an REO Property,
which is less
that 150 days delinquent, the obligation to make Advances shall
only be to
payments of interest (subject to the exceptions described above and
net of the
related Servicing Fees), to be calculated after taking into account
rental
income.
Advance Facility: A financing or other facility as described in
Section
10.07.
Advancing Person: A Person to whom the relevant Servicer's rights
under
this Agreement to be reimbursed for any Advances or Servicing
Advances have been
assigned pursuant to Section 10.07.
Affiliate: With respect to any specified Person, any other
Person
controlling, controlled by or under common control with such
Person. For the
purposes of this definition, "control" means the power to direct
the management
and policies of a Person, directly or indirectly, whether through
ownership of
voting securities, by contract or otherwise; and the terms
"controlling" and
"controlled" have meanings correlative to the foregoing.
Aggregate Certificate Principal Balance: For any date of
determination, the
sum of the Class A-1 Certificate Principal Balance, the Class A-2A
Certificate
Principal Balance, the Class A-2B Certificate Principal Balance,
the Class A-2C
Certificate Principal Balance, the Class A-2D Certificate Principal
Balance, the
Class R Certificate Principal Balance, the Class M-1 Certificate
Principal
Balance, the Class M-2 Certificate Principal Balance, the Class M-3
Certificate
Principal Balance, the Class M-4 Certificate Principal Balance, the
Class M-5
Certificate Principal Balance, the Class M-6 Certificate Principal
Balance, the
Class B-1 Certificate Principal Balance, the Class B-2 Certificate
Principal
Balance and the Class B-3 Certificate Principal Balance, in each
case as of such
date of determination.
Agreement: This Pooling and Servicing Agreement and any and all
amendments
or supplements hereto made in accordance with the terms herein.
Applied Realized Loss Amount: With respect to any Distribution
Date, the
amount, if any, by which the sum of (i) the Aggregate Certificate
Principal
Balance and (ii) the Class C Certificate Principal Balance after
distributions
of principal on such Distribution Date exceeds the aggregate Stated
Principal
Balance of the Mortgage Loans as of such Distribution Date.
Appraised Value: With respect to a Mortgage Loan the proceeds of
which were
used to purchase the related Mortgaged Property, the "Appraised
Value" of a
Mortgaged Property is the lesser of (1) the appraised value based
on an
appraisal made for the Sponsor by an independent fee appraiser at
the time of
the origination of the related Mortgage Loan, and (2) the sales
price of such
Mortgaged Property at such time of origination. With respect to a
Mortgage Loan
the proceeds of which were used to refinance an existing mortgage
loan, the
"Appraised Value" is the appraised value of the Mortgaged Property
based upon
the appraisal obtained at the time of refinancing.
Assessment of Compliance: As defined in Section 3.18.
-12-
<PAGE>
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer
or equivalent instrument, in recordable form, sufficient under the
laws of the
jurisdiction where the related Mortgaged Property is located to
reflect of
record the sale and assignment of the Mortgage Loan to the Trustee,
which
assignment, notice of transfer or equivalent instrument may, if
permitted by
law, be in the form of one or more blanket assignments covering
Mortgages
secured by Mortgaged Properties located in the same county.
Auction: The one-time auction conducted by the Securities
Administrator, as
described in Section 9.01(b) hereof.
Auction Date: The date on which the Auction occurs.
Authenticating Agent: As defined in Section 5.10.
Available Funds Cap: Any of the Class A-1 Available Funds Cap, the
Class
A-2 Available Funds Cap or the Weighted Average Available Funds
Cap.
Balloon Loan: A Mortgage Loan having an original term to stated
maturity of
approximately 15 or 30 years which provides for level monthly
payments of
principal and interest based on a 30- 40- or 50-year amortization
schedule, with
a balloon payment of the remaining outstanding principal balance
due on such
Mortgage Loan at its stated maturity.
Book-Entry Certificates: Any of the Certificates that shall be
registered
in the name of the Depository or its nominee, the ownership of
which is
reflected on the books of the Depository or on the books of a
Person maintaining
an account with the Depository (directly, as a "Depository
Participant", or
indirectly, as an indirect participant in accordance with the rules
of the
Depository and as described in Section 5.06). As of the Closing
Date, each of
the Class A (other than the Class R Certificate), Class M and Class
B
Certificates constitutes a Class of Book-Entry Certificates.
Bring Down Letters: Those certain letter agreements, each dated as
of
September 28, 2006 between each related Transferor and MLML.
Business Day: Any day other than (1) a Saturday or a Sunday, or (2)
a day
on which banking institutions in the State of Oregon, State of
California, State
of Illinois or in the City of New York, New York are authorized or
obligated by
law or executive order to be closed.
Cap
Contract: Any of the Class A-1 Cap Contract, the Class A-2 Cap
Contract
or the Subordinate Certificates Cap Contract.
Cap
Contract Account: The separate Eligible Account created and
maintained
by the Securities Administrator pursuant to Section 4.04(k)(i) in
the name of
the Trustee for the benefit of the Supplemental Interest Trust and
designated
"LaSalle Bank National Association, as securities administrator for
Citibank,
N.A., as trustee, in trust for registered holders of the
Supplemental Interest
Trust." Funds in the Cap Contract Account shall be held in trust
for the
Supplemental Interest Trust for the uses and purposes set forth in
this
Agreement.
Cap
Contract Counterparty: The Royal Bank of Scotland plc and its
successors.
Cap
Contract Notional Balance: Any of the Class A-1 Cap Contract
Notional
Balance, the Class A-2 Cap Contract Notional Balance or the
Subordinate
Certificates Cap Contract Notional Balance.
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<PAGE>
Cap
Contract Termination Date: The Distribution Date in March 2007.
Certificate: Any one of the certificates of any Class executed by
the
Securities Administrator and authenticated by the Securities
Administrator in
substantially the forms attached hereto as Exhibit A.
Certificate Account: The separate Eligible Account or Accounts
created and
maintained by the Securities Administrator pursuant to Section
3.05(f) in the
name of the Trustee for the benefit of the Certificateholders and
designated
"LaSalle Bank National Association, as securities administrator for
Citibank,
N.A. as trustee, in trust for registered holders of Merrill Lynch
Mortgage
Investors Trust, Mortgage Loan Asset-Backed Certificates, Series
2006-HE5."
Funds in the Certificate Account shall be held in trust for the
Certificateholders for the uses and purposes set forth in this
Agreement.
Certificate Group: Either of Certificate Group One or Certificate
Group
Two.
Certificate Group One: The Class A-1 and Class R Certificates. For
purposes
of Section 2.07 hereof, Certificate Group One shall be related to
Group One.
Certificate Group Two: The Class A-2 Certificates. For purposes of
Section
2.07 hereof, Certificate Group Two shall be related to Group
Two.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person
that is the beneficial owner of such Book-Entry Certificate.
Certificate Principal Balance: As to any Certificate and as of
any
Distribution Date, the Initial Certificate Principal Balance of
such Certificate
less the sum of (1) all amounts distributed with respect to such
Certificate in
reduction of the Certificate Principal Balance thereof on previous
Distribution
Dates pursuant to Section 4.04, and (2) any Applied Realized Loss
Amounts
allocated to such Certificate on previous Distribution Dates
pursuant to Section
4.04(i). On each Distribution Date, after all distributions of
principal on such
Distribution Date, a portion of the Class C Interest Carry Forward
Amount in an
amount equal to the excess of the Overcollateralization Amount on
such
Distribution Date over the Overcollateralization Amount as of the
preceding
Distribution Date (or, in the case of the first Distribution Date,
the initial
Overcollateralization Amount (based on the Stated Principal Balance
of the
Mortgage Loans as of the Cut-off Date)) will be added to the
aggregate
Certificate Principal Balance of the Class C Certificates (on a pro
rata basis).
Notwithstanding the immediately preceding sentence, however, to the
extent any
excess referred to in the immediately preceding sentence is
attributable to
distributions of proceeds of the Swap Agreement, such sentence
shall be applied
by substituting "Class C Unpaid Realized Loss Amount" for "Class C
Interest
Carry Forward Amount". Notwithstanding the foregoing on any
Distribution Date
relating to a Due Period in which a Subsequent Recovery has been
received by the
related Servicer, the Certificate Principal Balance of any Class of
Certificates
then outstanding for which any Applied Realized Loss Amount has
been allocated
will be increased, in order of seniority, by an amount equal to the
lesser of
(i) the Unpaid Realized Loss Amount for such Class of Certificates
and (ii) the
total of any Subsequent Recovery distributed on such date to
the
Certificateholders (reduced by the amount of the increase in the
Certificate
Principal Balance of any more senior Class of Certificates pursuant
to this
sentence on such Distribution Date).
Certificate Register: The register maintained pursuant to Section
5.02
hereof.
Certificateholder or Holder: The Person in whose name a Certificate
is
registered in the Certificate Register (initially, Cede & Co.,
as nominee for
the Depository) in the case of any Class of Regular Certificates or
the Class R
Certificate, except that solely for the purpose of giving any
consent pursuant
to this Agreement, any Certificate registered in the name of the
Depositor or
any Affiliate of the
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<PAGE>
Depositor shall be deemed not to be Outstanding and the Percentage
Interest
evidenced thereby shall not be taken into account in determining
whether the
requisite amount of Percentage Interests necessary to effect such
consent has
been obtained; provided, however, that if any such Person
(including the
Depositor) owns 100% of the Percentage Interests evidenced by a
Class of
Certificates, such Certificates shall be deemed to be Outstanding
for purposes
of any provision hereof that requires the consent of the Holders of
Certificates
of a particular Class as a condition to the taking of any action
hereunder. The
Securities Administrator and the Trustee are entitled to rely
conclusively on a
certification of the Depositor or any Affiliate of the Depositor in
determining
which Certificates are registered in the name of an Affiliate of
the Depositor.
Class: All Certificates bearing the same Class designation as set
forth in
Section 5.01 hereof.
Class A Certificate Principal Balance: As of any date of
determination, the
sum of the Class A-1 Certificate Principal Balance, the Class A-2A
Certificate
Principal Balance, the Class A-2B Certificate Principal Balance,
the Class A-2C
Certificate Principal Balance, the Class A-2D Certificate Principal
Balance and
the Class R Certificate Principal Balance.
Class A Certificates: Any of the Class A-1 Certificates, the Class
A-2
Certificates and the Class R Certificates.
Class A Principal Distribution Amount: With respect to any
Distribution
Date (1) prior to the related Stepdown Date or any Distribution
Date on which a
Stepdown Trigger Event exists, 100% of the Principal Distribution
Amount for
such Distribution Date and (2) on or after the Stepdown Date where
a Stepdown
Trigger Event does not exist, the excess of (A) the Class A
Certificate
Principal Balance immediately prior to such Distribution Date over
(B) the
lesser of (i) 55.80% of the aggregate Stated Principal Balance of
the Mortgage
Loans as of such Distribution Date and (ii) the excess of the
aggregate Stated
Principal Balance of the Mortgage Loans as of such Distribution
Date over the
Minimum Required Overcollateralization Amount; provided, however,
that in no
event will the Class A Principal Distribution Amount with respect
to any
Distribution Date exceed the aggregate Certificate Principal
Balance of the
Class A Certificates.
Class A-1 Available Funds Cap: With respect to a Distribution Date,
the per
annum rate equal to the product of (i) 12, (ii) the quotient of (x)
the total
scheduled interest on the Mortgage Loans in Group One based on the
Net Mortgage
Rates, less the pro rata portion (calculated based on the ratio of
the Group One
Mortgage Loans to the total pool of Mortgage Loans) allocable to
the Group One
Mortgage Loans of any Net Swap Payments or Swap Termination
Payments (other than
Defaulted Swap Termination Payments) owed to the Swap Counterparty
for such
Distribution Date in effect on the related Due Date divided by (y)
the aggregate
Stated Principal Balance of the Mortgage Loans in Group One as of
the first day
of the related Accrual Period (or, in the case of the first
Distribution Date,
as of the Cut-off Date) and (iii) a fraction, the numerator of
which is 30, and
the denominator of which is the actual number of days in the
related Accrual
Period.
Class A-1 Cap Contract: The master agreement, credit support annex
and
confirmation between the Securities Administrator on behalf of the
Supplemental
Interest Trust and the Cap Contract Counterparty (in the form of
Exhibit M-1
hereto).
Class A-1 Cap Contract Notional Balance: With respect to any
Distribution
Date, the Class A-1 Cap Contract Notional Balance set forth for
such
Distribution Date in the Class A-1 One-Month LIBOR Cap Table
attached hereto as
Exhibit N-1.
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<PAGE>
Class A-1 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class A-1
Certificates.
Class A-1 Certificates: Any Certificate designated as a "Class
A-1
Certificate" on the face thereof, in the form of Exhibit A hereto,
representing
the right to distributions as set forth herein.
Class A-1 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class A-1
Pass-Through Rate on
the Class A-1 Certificate Principal Balance as of such Distribution
Date plus
the portion of any previous distributions on such Class in respect
of Current
Interest or a Class A-1 Interest Carry Forward Amount that is
recovered as a
voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-1
Certificates.
Class A-1 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class A-1 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
A-1 Certificates with respect to interest on such prior
Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable
law) at the
Class A-1 Pass-Through Rate for the related Accrual Period.
Class A-1 Margin: As of any Distribution Date up to and including
the
Initial Optional Termination Date, 0.1500% per annum and, as of any
Distribution
Date after the Initial Optional Termination Date, 0.3000% per
annum.
Class A-1 Maximum Rate Cap: With respect to a Distribution Date,
the per
annum rate equal to the product of (i) 12, (ii) the quotient of (x)
the total
scheduled interest that would have been due on the Group One
Mortgage Loans had
the Adjustable Rate Mortgage Loans provided for interest at their
maximum
lifetime Net Mortgage Rates and the Fixed Rate Mortgage Loans
provided for
interest at their Net Mortgage Rates less the pro rata portion
(calculated based
on the ratio of the Group One Mortgage Loans to the total pool of
Mortgage
Loans) allocable to the Group One Mortgage Loans of any Net Swap
Payments or
Swap Termination Payments owed to the Swap Counterparty for such
Distribution
Date (other than Defaulted Swap Termination Payments), divided by
(y) the
aggregate Stated Principal Balance of the Group One Mortgage Loans
as of the
first day of the related Accrual Period and (iii) a fraction, the
numerator of
which is 30 and the denominator of which is the actual number of
days in the
related Accrual Period.
Class A-1 Pass-Through Rate: For the first Distribution Date,
5.47375% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class A-1 Margin, (2) the Class A-1 Available Funds Cap
for such
Distribution Date and (3) the Class A-1 Maximum Rate Cap for such
Distribution
Date.
Class A-2 Available Funds Cap: With respect to a Distribution Date,
the per
annum rate equal to the product of (i) 12 and (ii) the quotient of
(x) the total
scheduled interest on the Group Two Mortgage Loans based on the Net
Mortgage
Rates in effect on the related Due Date, less the pro rata portion
(calculated
based on the ratio of the Group Two Mortgage Loans to the total
pool of Mortgage
Loans) allocable to the Group Two Mortgage Loans of any Net Swap
Payments or
Swap Termination Payments (other than Defaulted Swap Termination
Payments) owed
to the Swap Counterparty for such Distribution Date, divided by (y)
the
aggregate Stated Principal Balance of the Group Two Mortgage Loans
as of the
first day of the related Accrual Period and multiplied by a
fraction, the
numerator of which is 30 and the denominator of which is the actual
number of
days in the related Accrual Period.
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<PAGE>
Class A-2 Cap Contract: The master agreement, credit support annex
and
confirmation between the Securities Administrator on behalf of the
Supplemental
Interest Trust and the Cap Contract Counterparty (in the form of
Exhibit M-2
hereto).
Class A-2 Cap Contract Notional Balance: With respect to any
Distribution
Date, the Class A-2 Cap Contract Notional Balance set forth for
such
Distribution Date in the Class A-2 One-Month LIBOR Cap Table
attached hereto as
Exhibit N-2.
Class A-2 Certificates: Any of the Class A-2A, Class A-2B, Class
A-2C and
Class A-2D Certificates.
Class A-2 Maximum Rate Cap: With respect to a Distribution Date,
the per
annum rate equal to the product of (i) 12 and (ii) the quotient of
(x) the total
scheduled interest that would have been due on the Group Two
Mortgage Loans had
the Adjustable Rate Mortgage Loans provided for interest at their
maximum
lifetime Net Mortgage Rates and the Fixed Rate Mortgage Loans
provided for
interest at their Net Mortgage Rates less the pro rata portion
(calculated based
on the ratio of the Group Two Mortgage Loans to the total pool of
Mortgage
Loans) allocable to the Group Two Mortgage Loans of any Net Swap
Payments or
Swap Termination Payments owed to the Swap Counterparty for such
Distribution
Date (other than Defaulted Swap Termination Payments), divided by
(y) the
aggregate Stated Principal Balance of the Group Two Mortgage Loans
as of the
first day of the related Accrual Period and multiplied by a
fraction, the
numerator of which is 30 and the denominator of which is the actual
number of
days in the related Accrual Period.
Class A-2A Certificate: Any Certificate designated as a "Class
A-2A
Certificate" on the face thereof, in the form of Exhibit A hereto,
representing
the right to distributions as set forth herein.
Class A-2A Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class A-2A
Certificates.
Class A-2A Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class A-2A
Pass-Through Rate on
the Class A-2A Certificate Principal Balance as of such
Distribution Date plus
the portion of any previous distributions on such Class in respect
of Current
Interest or a Class A-2A Interest Carry Forward Amount that is
recovered as a
voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-2A
Certificates.
For purposes of calculating interest, principal distributions on a
Distribution
Date will be deemed to have been made on the first day of the
Accrual Period in
which such Distribution Date occurs.
Class A-2A Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class A-2A Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
A-2A Certificates with respect to interest on such prior
Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable
law) at the
Class A-2A Pass-Through Rate for the related Accrual Period.
Class A-2A Margin: As of any Distribution Date up to and including
the
Initial Optional Termination Date, 0.0600% per annum and, as of any
Distribution
Date after the Initial Optional Termination Date, 0.1200% per
annum.
Class A-2A Pass-Through Rate: For the first Distribution Date,
5.38375% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class A-2A Margin, (2) the
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<PAGE>
Class A-2 Available Funds Cap for such Distribution Date and (3)
the Class A-2
Maximum Rate Cap for such Distribution Date.
Class A-2B Certificate: Any Certificate designated as a "Class
A-2B
Certificate" on the face thereof, in the form of Exhibit A hereto,
representing
the right to distributions as set forth herein.
Class A-2B Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class A-2B
Certificates.
Class A-2B Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class A-2B
Pass-Through Rate on
the Class A-2B Certificate Principal Balance as of such
Distribution Date plus
the portion of any previous distributions on such Class in respect
of Current
Interest or a Class A-2B Interest Carry Forward Amount that is
recovered as a
voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-2B
Certificates.
For purposes of calculating interest, principal distributions on a
Distribution
Date will be deemed to have been made on the first day of the
Accrual Period in
which such Distribution Date occurs.
Class A-2B Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class A-2B Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
A-2B Certificates with respect to interest on such prior
Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable
law) at the
Class A-2B Pass-Through Rate for the related Accrual Period.
Class A-2B Margin: As of any Distribution Date up to and including
the
Initial Optional Termination Date, 0.1100% per annum and, as of any
Distribution
Date after the Initial Optional Termination Date, 0.2200% per
annum.
Class A-2B Pass-Through Rate: For the first Distribution Date,
5.43375% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class A-2B Margin, (2) the Class A-2 Available Funds Cap
for such
Distribution Date and (3) the Class A-2 Maximum Rate Cap for such
Distribution
Date.
Class A-2C Certificate: Any Certificate designated as a "Class
A-2C
Certificate" on the face thereof, in the form of Exhibit A hereto,
representing
the right to distributions as set forth herein.
Class A-2C Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class A-2C
Certificates.
Class A-2C Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class A-2C
Pass-Through Rate on
the Class A-2C Certificate Principal Balance as of such
Distribution Date plus
the portion of any previous distributions on such Class in respect
of Current
Interest or a Class A-2C Interest Carry Forward Amount that is
recovered as a
voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-2C
Certificates.
For purposes of calculating interest, principal distributions on a
Distribution
Date will be deemed to have been made on the first day of the
Accrual Period in
which such Distribution Date occurs.
Class A-2C Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class A-2C Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
A-2C Certificates with respect to interest on such prior
Distribution Dates
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<PAGE>
and (2) interest on such excess (to the extent permitted by
applicable law) at
the Class A-2C Pass-Through Rate for the related Accrual
Period.
Class A-2C Margin: As of any Distribution Date up to and including
the
Initial Optional Termination Date, 0.1500% per annum and, as of any
Distribution
Date after the Initial Optional Termination Date, 0.3000% per
annum.
Class A-2C Pass-Through Rate: For the first Distribution Date,
5.47375% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class A-2C Margin, (2) the Class A-2 Available Funds Cap
for such
Distribution Date and (3) the Class A-2 Maximum Rate Cap for such
Distribution
Date.
Class A-2D Certificate: Any Certificate designated as a "Class
A-2D
Certificate" on the face thereof, in the form of Exhibit A hereto,
representing
the right to distributions as set forth herein.
Class A-2D Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class A-2D
Certificates.
Class A-2D Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class A-2D
Pass-Through Rate on
the Class A-2D Certificate Principal Balance as of such
Distribution Date plus
the portion of any previous distributions on such Class in respect
of Current
Interest or a Class A-2D Interest Carry Forward Amount that is
recovered as a
voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-2D
Certificates.
For purposes of calculating interest, principal distributions on a
Distribution
Date will be deemed to have been made on the first day of the
Accrual Period in
which such Distribution Date occurs.
Class A-2D Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class A-2D Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
A-2D Certificates with respect to interest on such prior
Distribution Dates
and (2) interest on such excess (to the extent permitted by
applicable law) at
the Class A-2D Pass-Through Rate for the related Accrual
Period.
Class A-2D Margin: As of any Distribution Date up to and including
the
Initial Optional Termination Date, 0.2400% per annum and, as of any
Distribution
Date after the Initial Optional Termination Date, 0.4800% per
annum.
Class A-2D Pass-Through Rate: For the first Distribution Date,
5.56375% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class A-2D Margin, (2) the Class A-2 Available Funds Cap
for such
Distribution Date and (3) the Class A-2 Maximum Rate Cap for such
Distribution
Date.
Class B Certificates: Any of the Class B-1, Class B-2 and Class
B-3
Certificates.
Class B-1 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans
which have been applied to the reduction of the Certificate
Principal Balance of
the Class B-1 Certificates.
Class B-1 Certificate: Any Certificate designated as a "Class
B-1
Certificate" on the face thereof, in the form of Exhibit A hereto,
representing
the right to distributions as set forth herein.
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<PAGE>
Class B-1 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class B-1
Certificates.
Class B-1 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class B-1
Pass-Through Rate on
the Class B-1 Certificate Principal Balance as of such Distribution
Date plus
the portion of any previous distributions on such Class in respect
of Current
Interest or a Class B-1 Interest Carry Forward Amount that is
recovered as a
voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class B-1
Certificates.
Class B-1 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class B-1 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
B-1 Certificates with respect to interest on such prior
Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable
law) at the
Class B-1 Pass-Through Rate for the related Accrual Period.
Class B-1 Margin: As of any Distribution Date up to and including
the
Initial Optional Termination Date, 0.8000% per annum and, as of any
Distribution
Date after the Initial Optional Termination Date, 1.2000% per
annum.
Class B-1 Pass-Through Rate: For the first Distribution Date,
6.12375% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class B-1 Margin, (2) the Weighted Average Available Funds
Cap for such
Distribution Date and (3) the Weighted Average Maximum Rate Cap for
such
Distribution Date.
Class B-1 Principal Distribution Amount: With respect to any
Distribution
Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount
for such Distribution Date if the Class A Certificate Principal
Balance and the
Class M Certificate Principal Balance, have been reduced to zero
and a Stepdown
Trigger Event exists, or as long as a Stepdown Trigger Event does
not exist, the
excess of (1) the sum of (A) the Class A Certificate Principal
Balance (after
taking into account distributions of the Class A Principal
Distribution Amount
on such Distribution Date), (B) the Class M-1 Certificate Principal
Balance, the
Class M-2 Certificate Principal Balance and the Class M-3
Certificate Principal
Balance (after taking into account distributions of the Class
M-1/M-2/M-3
Principal Distribution Amount on such Distribution Date), (C) the
Class M-4
Certificate Principal Balance (after taking into account
distributions of the
Class M-4 Principal Distribution Amount on such Distribution Date,
(D) the Class
M-5 Certificate Principal Balance (after taking into account
distributions of
the Class M-5 Principal Distribution Amount on such Distribution
Date, (E) the
Class M-6 Certificate Principal Balance (after taking into account
distributions
of the Class M-6 Principal Distribution Amount on such Distribution
Date and (F)
the Class B-1 Certificate Principal Balance immediately prior to
such
Distribution Date over (2) the lesser of (A) 86.60% of the Stated
Principal
Balance of the Mortgage Loans as of such Distribution Date and (B)
the excess of
the Stated Principal Balance of the Mortgage Loans as of such
Distribution Date
over the Minimum Required Overcollateralization Amount.
Notwithstanding the
foregoing, (I) on any Distribution Date prior to the Stepdown Date
on which the
Certificate Principal Balance of each Class of Class A Certificates
and Class M
Certificates has been reduced to zero, the Class B-1 Principal
Distribution
Amount will equal the lesser of (x) the outstanding Certificate
Principal
Balance of the Class B-1 Certificates and (y) 100% of the Principal
Distribution
Amount remaining after any distributions on such Class A and Class
M
Certificates and (II) in no event will the Class B-1 Principal
Distribution
Amount with respect to any Distribution Date exceed the Class B-1
Certificate
Principal Balance.
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Class B-1 Unpaid Realized Loss Amount: As of any Distribution Date,
the
excess of (1) the Class B-1 Applied Realized Loss Amount over (2)
the sum of (x)
all distributions in reduction of the Class B-1 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of the Class B-1 Certificates pursuant to the
last sentence of
the definition of "Certificate Principal Balance."
Class B-2 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans
which have been applied to the reduction of the Certificate
Principal Balance of
the Class B-2 Certificates.
Class B-2 Certificate: Any Certificate designated as a "Class
B-2
Certificate" on the face thereof, in the form of Exhibit A hereto,
representing
the right to distributions as set forth herein.
Class B-2 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class B-2
Certificates.
Class B-2 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class B-2
Pass-Through Rate on
the Class B-2 Certificate Principal Balance as of such Distribution
Date plus
the portion of any previous distributions on such Class in respect
of Current
Interest or a Class B-2 Interest Carry Forward Amount that is
recovered as a
voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class B-2
Certificates.
Class B-2 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class B-2 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
B-2 Certificates with respect to interest on such prior
Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable
law) at the
Class B-2 Pass-Through Rate for the related Accrual Period.
Class B-2 Margin: As of any Distribution Date up to and including
the
Initial Optional Termination Date, 1.0000% per annum and, as of any
Distribution
Date after the Initial Optional Termination Date, 1.5000% per
annum.
Class B-2 Pass-Through Rate: For the first Distribution Date,
6.32375% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class B-2 Margin, (2) the Weighted Average Available Funds
Cap for such
Distribution Date and (3) the Weighted Average Maximum Rate Cap for
such
Distribution Date.
Class B-2 Principal Distribution Amount: With respect to any
Distribution
Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount
for such Distribution Date if the Class A Certificate Principal
Balance, the
Class M Certificate Principal Balance and the Class B-1 Certificate
Principal
Balance have been reduced to zero and a Stepdown Trigger Event
exists, or as
long as a Stepdown Trigger Event does not exist, the excess of (1)
the sum of
(A) the Class A Certificate Principal Balance (after taking into
account
distributions of the Class A Principal Distribution Amount on such
Distribution
Date), (B) the Class M-1 Certificate Principal Balance, the Class
M-2
Certificate Principal Balance and the Class M-3 Certificate
Principal Balance
(after taking into account distributions of the Class M-1/M-2/M-3
Principal
Distribution Amount on such Distribution Date), (C) the Class M-4
Certificate
Principal Balance (after taking into account distributions of the
Class M-4
Principal Distribution Amount on such Distribution Date), (D) the
Class M-5
Certificate Principal Balance (after taking into account
distributions of the
Class M-5 Principal Distribution Amount on such Distribution Date),
(E) the
Class M-6 Certificate Principal Balance (after taking into account
distributions
of the Class
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<PAGE>
M-6 Principal Distribution Amount on such Distribution Date), (F)
the Class B-1
Certificate Principal Balance (after taking into account
distributions of the
Class B-1 Principal Distribution Amount on such Distribution Date)
and (G) the
Class B-2 Certificate Principal Balance immediately prior to such
Distribution
Date over (2) the lesser of (A) 89.40% of the Stated Principal
Balance of the
Mortgage Loans as of such Distribution Date and (B) the excess of
the Stated
Principal Balance of the Mortgage Loans as of such Distribution
Date over the
Minimum Required Overcollateralization Amount. Notwithstanding the
foregoing,
(I) on any Distribution Date prior to the Stepdown Date on which
the Certificate
Principal Balance of each Class of Class A, Class M and Class B-1
Certificates
has been reduced to zero, the Class B-2 Principal Distribution
Amount will equal
the lesser of (x) the outstanding Certificate Principal Balance of
the Class B-2
Certificates and (y) 100% of the Principal Distribution Amount
remaining after
any distributions on such Class A, Class M and Class B-1
Certificates and (II)
in no event will the Class B-2 Principal Distribution Amount with
respect to any
Distribution Date exceed the Class B-2 Certificate Principal
Balance.
Class B-2 Unpaid Realized Loss Amount: As of any Distribution Date,
the
excess of (1) the Class B-2 Applied Realized Loss Amount over (2)
the sum of (x)
all distributions in reduction of the Class B-2 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of the Class B-2 Certificates pursuant to the
last sentence of
the definition of "Certificate Principal Balance."
Class B-3 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans
which have been applied to the reduction of the Certificate
Principal Balance of
the Class B-3 Certificates.
Class B-3 Certificate: Any Certificate designated as a "Class
B-3
Certificate" on the face thereof in the form of Exhibit A hereto,
representing
the right to distributions as set forth herein.
Class B-3 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class B-3
Certificates.
Class B-3 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class B-3
Pass-Through Rate on
the Class B-3 Certificate Principal Balance as of such Distribution
Date plus
the portion of any previous distributions on such Class in respect
of Current
Interest or a Class B-3 Interest Carry Forward Amount that is
recovered as a
voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class B-3
Certificates.
Class B-3 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class B-3 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
B-3 Certificates with respect to interest on such prior
Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable
law) at the
Class B-3 Pass-Through Rate for the related Accrual Period.
Class B-3 Margin: As of any Distribution Date up to and including
the
Initial Optional Termination Date, 2.0000% per annum and, as of any
Distribution
Date after the Initial Optional Termination Date, 3.0000% per
annum.
Class B-3 Pass-Through Rate: For the first Distribution Date,
7.32375% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class B-3 Margin, (2) the Weighted Average Available Funds
Cap for such
Distribution Date and (3) the Weighted Average Maximum Rate Cap for
such
Distribution Date.
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<PAGE>
Class B-3 Principal Distribution Amount: With respect to any
Distribution
Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount
for such Distribution Date if the Class A Certificate Principal
Balance, the
Class M Certificate Principal Balance, the Class B-1 Certificate
Principal
Balance and the Class B-2 Certificate Principal Balance have been
reduced to
zero and a Stepdown Trigger Event exists, or as long as a Stepdown
Trigger Event
does not exist, the excess of (1) the sum of (A) the Class A
Certificate
Principal Balance (after taking into account distributions of the
Class A
Principal Distribution Amount on such Distribution Date), (B) the
Class M-1
Certificate Principal Balance, the Class M-2 Certificate Principal
Balance and
the Class M-3 Certificate Principal Balance (after taking into
account
distributions of the Class M-1/M-2/M-3 Principal Distribution
Amount on such
Distribution Date), (C) the Class M-4 Certificate Principal Balance
(after
taking into account distributions of the Class M-4 Principal
Distribution Amount
on such Distribution Date), (D) the Class M-5 Certificate Principal
Balance
(after taking into account distributions of the Class M-5 Principal
Distribution
Amount on such Distribution Date), (E) the Class M-6 Certificate
Principal
Balance (after taking into account distributions of the Class M-6
Principal
Distribution Amount on such Distribution Date), (F) the Class B-1
Certificate
Principal Balance (after taking into account distributions of the
Class B-1
Principal Distribution Amount on such Distribution Date), (G) the
Class B-2
Certificate Principal Balance (after taking into account
distributions of the
Class B-2 Principal Distribution Amount on such Distribution Date)
and (H) the
Class B-3 Certificate Principal Balance immediately prior to such
Distribution
Date over (2) the lesser of (A) 91.60% of the Stated Principal
Balance of the
Mortgage Loans as of such Distribution Date and (B) the excess of
the Stated
Principal Balance of the Mortgage Loans as of such Distribution
Date over the
Minimum Required Overcollateralization Amount. Notwithstanding the
foregoing,
(I) on any Distribution Date prior to the Stepdown Date on which
the Certificate
Principal Balance of each Class of Class A, Class M, Class B-1 and
Class B-2
Certificates has been reduced to zero, the Class B-3 Principal
Distribution
Amount will equal the lesser of (x) the outstanding Certificate
Principal
Balance of the Class B-3 Certificates and (y) 100% of the Principal
Distribution
Amount remaining after any distributions on such Class A, Class M,
Class B-1 and
Class B-2 Certificates and (II) in no event will the Class B-3
Principal
Distribution Amount with respect to any Distribution Date exceed
the Class B-3
Certificate Principal Balance.
Class B-3 Unpaid Realized Loss Amount: As of any Distribution Date,
the
excess of (1) the Class B-3 Applied Realized Loss Amount over (2)
the sum of (x)
all distributions in reduction of the Class B-3 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of the Class B-3 Certificates pursuant to the
last sentence of
the definition of "Certificate Principal Balance".
Class C Applied Realized Loss Amount: As of any Distribution Date,
the sum
of all Applied Realized Loss Amounts with respect to the Mortgage
Loans which
have been applied to the reduction of the Certificate Principal
Balance of the
Class C Certificates.
Class C Certificate: Any Certificate designated as a "Class C
Certificate"
on the face thereof, in the form of Exhibit A hereto, representing
the right to
distributions as set forth herein.
Class C Certificate Principal Balance: As of any date of
determination, the
aggregate Certificate Principal Balance of the Class C
Certificates.
Class C Current Interest: As of any Distribution Date, the interest
accrued
during the related Accrual Period at the Class C Distributable
Interest Rate on
a notional amount equal to the aggregate principal balance of the
Lower Tier
REMIC Regular Interests immediately prior to such Distribution
Date, plus the
interest portion of any previous distributions on such Class that
is recovered
as a voidable
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<PAGE>
preference by a trustee in bankruptcy, less any Non-Supported
Interest Shortfall
allocated on such Distribution Date to the Class C
Certificates.
Class C Distributable Interest Rate: The excess, if any, of (a)
the
weighted average of the interest rates on the Lower Tier REMIC
Regular Interests
(other than the Class LT-IO Interest) over (b) two times the
weighted average of
the interest rates on the Lower Tier REMIC I Marker Interests and
the Class LTIX
Interest (treating for purposes of this clause (b) the interest
rate on each of
the Lower Tier REMIC I Marker Interests as being subject to a cap
and a floor
equal to the interest rate of the Corresponding REMIC Regular
Interest of the
Corresponding Certificates (as adjusted, if necessary, to reflect
the length of
the Accrual Period for the LIBOR Certificates) and treating the
Class LTIX
Interest as being capped at zero). The averages described in the
preceding
sentence shall be weighted on the basis of the respective principal
balances of
the Lower Tier REMIC Regular Interests immediately prior to any
date of
determination.
Class C Interest Carry Forward Amount: As of any Distribution Date,
the
excess of (A) the Class C Current Interest with respect to prior
Distribution
Dates over (B) the amount actually distributed to the Class C
Certificates with
respect to interest on such prior Distribution Dates or added to
the aggregate
Certificate Principal Balance of the Class C Certificates (other
than amounts so
added attributable to Subsequent Recoveries or proceeds of the Swap
Agreement).
Class C Unpaid Realized Loss Amount: As of any Distribution Date,
the
excess of (1) the Class C Applied Realized Loss Amount over (2) the
sum of (x)
all distributions in reduction of the Class C Unpaid Realized Loss
Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of such Class C Certificates pursuant (A) to the
last sentence
of the definition of "Certificate Principal Balance" or (B)
attributable to
distributions of proceeds of the Swap Agreement.
Class LTA-1 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificates and an interest rate
equal to the Net
Rate.
Class LTA-2A Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTA-2B Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTA-2C Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTA-2D Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTB-1 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
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<PAGE>
Class LTB-2 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTB-3 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LT-IO Interest: An uncertificated regular interest in the
Lower Tier
REMIC with the characteristics set forth in the description of the
Lower Tier
REMIC in the Preliminary Statement.
Class LTIX Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to the excess of (i)
50% of the
aggregate Cut-off Date Principal Balance of the Mortgage Loans over
(ii) the
initial principal balance of the Lower Tier REMIC I Marker
Interests, and with
an interest rate equal to the Net Rate.
Class LTIIX Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to the excess of (i)
50% of the
aggregate Cut-off Date Principal Balance of the Mortgage Loans over
(ii) the
initial principal balance of the Lower Tier REMIC II Marker
Interests, and with
an interest rate equal to the Net Rate.
Class LTII1A Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 0.05% of the
excess of (i) the
aggregate Cut-off Date Principal Balance of the Group One Mortgage
Loans over
(ii) the aggregate of the initial Certificate Principal Balances of
Certificate
Group One, and with an interest rate equal to the Net Rate.
Class LTII1B Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 0.05% the
aggregate Cut-off
Date Principal Balance of the Group One Mortgage Loans, and with an
interest
rate equal to the rate set forth in footnote 9 to the description
of the Lower
Tier REMIC in the Preliminary Statement.
Class LTII2A Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 0.05% of the
excess of (i) the
aggregate Cut-off Date Principal Balance of the Group Two Mortgage
Loans over
(ii) the aggregate of the initial Certificate Principal Balances of
Certificate
Group Two, and with an interest rate equal to the Net Rate.
Class LTII2B Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 0.05% of the
aggregate Cut-off
Date Principal Balance of the Group Two Mortgage Loans and with an
interest rate
equal to the rate set forth in footnote 10 to the description of
the Lower Tier
REMIC in the Preliminary Statement.
Class LTM-1 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTM-2 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
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<PAGE>
Class LTM-3 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTM-4 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTM-5 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTM-6 Interest: An uncertificated regular interest in the
Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial
principal
balance of its Corresponding Certificate and an interest rate equal
to the Net
Rate.
Class LTR Interest: The sole class of "residual interest" in the
Lower Tier
REMIC.
Class M Certificates: Any of the Class M-1, Class M-2, Class M-3,
Class
M-4, Class M-5 and Class M-6 Certificates.
Class M Certificate Principal Balance: For any date of
determination, the
sum of the Class M-1 Certificate Principal Balance, Class M-2
Certificate
Principal Balance, Class M-3 Certificate Principal Balance, Class
M-4
Certificate Principal Balance, Class M-5 Certificate Principal
Balance and Class
M-6 Certificate Principal Balance.
Class M-1 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans
which have been applied to the reduction of the Certificate
Principal Balance of
the Class M-1 Certificates.
Class M-1 Certificate: Any Certificate designated as a "Class
M-1
Certificate" on the face thereof, in the form of Exhibit A hereto,
representing
the right to distributions as set forth herein.
Class M-1 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class M-1
Certificates.
Class M-1 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class M-1
Pass-Through Rate on
the Class M-1 Certificate Principal Balance as of such Distribution
Date plus
the portion of any previous distributions on such Class in respect
of Current
Interest or Class M-1 Interest Carry Forward Amount that is
recovered as a
voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-1
Certificates.
Class M-1 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class M-1 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
M-1 Certificates with respect to interest on such prior
Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable
law) at the
Class M-1 Pass-Through Rate for the related Accrual Period.
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<PAGE>
Class M-1 Margin: As of any Distribution Date up to and including
the
Initial Optional Termination Date, 0.2600% per annum and, as of any
Distribution
Date after the Initial Optional Termination Date, 0.3900% per
annum.
Class M-1 Pass-Through Rate: For the first Distribution Date,
5.58375% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class M-1 Margin, (2) the Weighted Average Available Funds
Cap for such
Distribution Date and (3) the Weighted Average Maximum Rate Cap for
such
Distribution Date.
Class M-1/M-2/M-3 Principal Distribution Amount: With respect to
any
Distribution Date on or after the Stepdown Date, 100% of the
Principal
Distribution Amount for such Distribution Date if the Class A
Certificate
Principal Balance has been reduced to zero and a Stepdown Trigger
Event exists,
or as long as a Stepdown Trigger Event does not exist, the excess
of (1) the sum
of (A) the Class A Certificate Principal Balance (after taking into
account
distributions of the Class A Principal Distribution Amount on such
Distribution
Date) and (B) the Class M-1, Class M-2 and Class M-3 Certificate
Principal
Balance immediately prior to such Distribution Date over (2) the
lesser of (A)
73.40% of the Stated Principal Balances of the Mortgage Loans as of
such
Distribution Date and (B) the excess of the Stated Principal
Balances for the
Mortgage Loans as of such Distribution Date over the Minimum
Required
Overcollateralization Amount. Notwithstanding the foregoing, (I) on
any
Distribution Date prior to the Stepdown Date on which the
Certificate Principal
Balance of each Class of Class A Certificates has been reduced to
zero, the
Class M-1/M-2/M-3 Principal Distribution Amount will equal the
lesser of (x) the
outstanding Certificate Principal Balance of the Class M-1, Class
M-2 and Class
M-3 Certificates and (y) 100% of the Principal Distribution Amount
remaining
after any distributions on such Class A Certificates and (II) in no
event will
the Class M-1/M-2/M-3 Principal Distribution Amount with respect to
any
Distribution Date exceed the Class M-1, Class M-2 and Class M-3
Certificate
Principal Balance.
Class M-1 Unpaid Realized Loss Amount: As of any Distribution Date,
the
excess of (1) the Class M-1 Applied Realized Loss Amount over (2)
the sum of (x)
all distributions in reduction of the Class M-1 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of such Class M-1 Certificates pursuant to the
last sentence
of the definition of "Certificate Principal Balance."
Class M-2 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans
which have been applied to the reduction of the Certificate
Principal Balance of
the Class M-2 Certificates.
Class M-2 Certificate: Any Certificate designated as a "Class
M-2
Certificate" on the face thereof, in the form of Exhibit A hereto,
representing
the right to distributions as set forth herein.
Class M-2 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class M-2
Certificates.
Class M-2 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class M-2
Pass-Through Rate on
the Class M-2 Certificate Principal Balance as of such Distribution
Date plus
the portion of any previous distributions on such Class in respect
of Current
Interest or Class M-2 Interest Carry Forward Amount that is
recovered as a
voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-2
Certificates.
Class M-2 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class M-2 Current Interest with
respect to
prior Distribution Dates over (B) the amount
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<PAGE>
actually distributed to the Class M-2 Certificates with respect to
interest on
such prior Distribution Dates and (2) interest on such excess (to
the extent
permitted by applicable law) at the Class M-2 Pass-Through Rate for
the related
Accrual Period.
Class M-2 Margin: As of any Distribution Date up to and including
the
Initial Optional Termination Date, 0.3000% per annum and, as of any
Distribution
Date after the Initial Optional Termination Date, 0.4500% per
annum.
Class M-2 Pass-Through Rate: For the first Distribution Date,
5.62375% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class M-2 Margin, (2) the Weighted Average Available Funds
Cap for such
Distribution Date and (3) the Weighted Average Maximum Rate Cap for
such
Distribution Date.
Class M-2 Unpaid Realized Loss Amount: As of any Distribution Date,
the
excess of (1) the Class M-2 Applied Realized Loss Amount over (2)
the sum of (x)
all distributions in reduction of the Class M-2 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of such Class M-2 Certificates pursuant to the
last sentence
of the definition of "Certificate Principal Balance."
Class M-3 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans
which have been applied to the reduction of the Certificate
Principal Balance of
the Class M-3 Certificates.
Class M-3 Certificate: Any Certificate designated as a "Class
M-3
Certificate" on the face thereof, in the form of Exhibit A hereto,
representing
the right to distributions as set forth herein.
Class M-3 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class M-3
Certificates.
Class M-3 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class M-3
Pass-Through Rate on
the Class M-3 Certificate Principal Balance as of such Distribution
Date plus
the portion of any previous distributions on such Class in respect
of Current
Interest or Class M-3 Interest Carry Forward Amount that is
recovered as a
voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-3
Certificates.
Class M-3 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class M-3 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
M-3 Certificates with respect to interest on such prior
Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable
law) at the
Class M-3 Pass-Through Rate for the related Accrual Period.
Class M-3 Margin: As of any Distribution Date up to and including
the
Initial Optional Termination Date, 0.3300% per annum and, as of any
Distribution
Date after the Initial Optional Termination Date, 0.4950% per
annum.
Class M-3 Pass-Through Rate: For the first Distribution Date,
5.65375% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class M-3 Margin, (2) the Weighted Average Available Funds
Cap for such
Distribution Date and (3) the Weighted Average Maximum Rate Cap for
such
Distribution Date.
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<PAGE>
Class M-3 Unpaid Realized Loss Amount: As of any Distribution Date,
the
excess of (1) the Class M-3 Applied Realized Loss Amount over (2)
the sum of (x)
all distributions in reduction of the Class M-3 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of such Class M-3 Certificates pursuant to the
last sentence
of the definition of "Certificate Principal Balance."
Class M-4 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans
which have been applied to the reduction of the Certificate
Principal Balance of
the Class M-4 Certificates.
Class M-4 Certificate: Any Certificate designated as a "Class
M-4
Certificate" on the face thereof, in the form of Exhibit A hereto,
representing
the right to distributions as set forth herein.
Class M-4 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class M-4
Certificates.
Class M-4 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class M-4
Pass-Through Rate on
the Class M-4 Certificate Principal Balance as of such Distribution
Date plus
the portion of any previous distributions on such Class in respect
of Current
Interest or Class M-4 Interest Carry Forward Amount that is
recovered as a
voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-4
Certificates.
Class M-4 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class M-4 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
M-4 Certificates with respect to interest on such prior
Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable
law) at the
Class M-4 Pass-Through Rate for the related Accrual Period.
Class M-4 Margin: As of any Distribution Date up to and including
the
Initial Optional Termination Date, 0.3800% per annum and, as of any
Distribution
Date after the Initial Optional Termination Date, 0.5700% per
annum.
Class M-4 Pass-Through Rate: For the first Distribution Date,
5.70375% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class M-4 Margin, (2) the Weighted Average Available Funds
Cap for such
Distribution Date and (3) the Weighted Average Maximum Rate Cap for
such
Distribution Date.
Class M-4 Principal Distribution Amount: With respect to any
Distribution
Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount
for such Distribution Date if the Class A Certificate Principal
Balance, Class
M-1 Certificate Principal Balance, Class M-2 Certificate Principal
Balance and
Class M-3 Certificate Principal Balance have been reduced to zero
and a Stepdown
Trigger Event exists, or as long as a Stepdown Trigger Event does
not exist, the
excess of (1) the sum of (A) the Class A Certificate Principal
Balance (after
taking into account distributions of the Class A Principal
Distribution Amount
on such Distribution Date), (B) the Class M-1, Class M-2 and M-3
Certificate
Principal Balance (after taking into account distributions of the
Class
M-1/M-2/M-3 Principal Distribution Amount on such Distribution
Date) and (C) the
Class M-4 Certificate Principal Balance immediately prior to such
Distribution
Date over (2) the lesser of (A) 77.00% of the Stated Principal
Balances of the
Mortgage Loans as of such Distribution Date and (B) the excess of
the Stated
Principal Balances for the Mortgage Loans as of such Distribution
Date over the
Minimum Required Overcollateralization Amount. Notwithstanding the
foregoing,
(I) on any Distribution Date prior to the
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Stepdown Date on which the Certificate Principal Balance of each
Class of Class
A Certificates, the Class M-1 Certificates, the Class M-2
Certificates and the
Class M-3 Certificates has been reduced to zero, the Class M-4
Principal
Distribution Amount will equal the lesser of (x) the outstanding
Certificate
Principal Balance of the Class M-4 Certificates and (y) 100% of the
Principal
Distribution Amount remaining after any distributions on such Class
A, Class
M-1, Class M-2 and Class M-3 Certificates and (II) in no event will
the Class
M-4 Principal Distribution Amount with respect to any Distribution
Date exceed
the Class M-4 Certificate Principal Balance.
Class M-4 Unpaid Realized Loss Amount: As of any Distribution Date,
the
excess of (1) the Class M-4 Applied Realized Loss Amount over (2)
the sum of (x)
all distributions in reduction of the Class M-4 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of such Class M-4 Certificates pursuant to the
last sentence
of the definition of "Certificate Principal Balance."
Class M-5 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans
which have been applied to the reduction of the Certificate
Principal Balance of
the Class M-5 Certificates.
Class M-5 Certificate: Any Certificate designated as a "Class
M-5
Certificate" on the face thereof, in the form of Exhibit A hereto,
representing
the right to distributions as set forth herein.
Class M-5 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class M-5
Certificates.
Class M-5 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class M-5
Pass-Through Rate on
the Class M-5 Certificate Principal Balance as of such Distribution
Date plus
the portion of any previous distributions on such Class in respect
of Current
Interest or Class M-5 Interest Carry Forward Amount that is
recovered as a
voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-5
Certificates.
Class M-5 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class M-5 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
M-5 Certificates with respect to interest on such prior
Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable
law) at the
Class M-5 Pass-Through Rate for the related Accrual Period.
Class M-5 Margin: As of any Distribution Date up to and including
the
Initial Optional Termination Date, 0.4100% per annum and, as of any
Distribution
Date after the Initial Optional Termination Date, 0.6150% per
annum.
Class M-5 Pass-Through Rate: For the first Distribution Date,
5.73375% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class M-5 Margin, (2) the Weighted Average Available Funds
Cap for such
Distribution Date and (3) the Weighted Average Maximum Rate Cap for
such
Distribution Date.
Class M-5 Principal Distribution Amount: With respect to any
Distribution
Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount
for such Distribution Date if the Class A Certificate Principal
Balance, Class
M-1 Certificate Principal Balance, Class M-2 Certificate Principal
Balance,
Class M-3 Certificate Principal Balance and Class M-4 Certificate
Principal
Balance have been reduced to zero and a Stepdown Trigger Event
exists, or as
long as a Stepdown Trigger Event does not
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exist, the excess of (1) the sum of (A) the Class A Certificate
Principal
Balance (after taking into account distributions of the Class A
Principal
Distribution Amount on such Distribution Date), (B) the Class M-1,
Class M-2 and
Class M-3 Certificate Principal Balance (after taking into account
distributions
of the Class M-1/M-2/M-3 Principal Distribution Amount on such
Distribution
Date), (C) the Class M-4 Certificate Principal Balance (after
taking into
account distributions of the Class M-4 Principal Distribution
Amount on such
Distribution Date) and (D) the Class M-5 Certificate Principal
Balance
immediately prior to such Distribution Date over (2) the lesser of
(A) 80.40% of
the Stated Principal Balances of the Mortgage Loans as of such
Distribution Date
and (B) the excess of the Stated Principal Balances for the
Mortgage Loans as of
such Distribution Date over the Minimum Required
Overcollateralization Amount.
Notwithstanding the foregoing, (I) on any Distribution Date prior
to the
Stepdown Date on which the Certificate Principal Balance of each
Class of Class
A Certificates, the Class M-1 Certificates, the Class M-2
Certificates, the
Class M-3 Certificates and the Class M-4 Certificates has been
reduced to zero,
the Class M-5 Principal Distribution Amount will equal the lesser
of (x) the
outstanding Certificate Principal Balance of the Class M-5
Certificates and (y)
100% of the Principal Distribution Amount remaining after any
distributions on
such Class A, Class M-1, Class M-2, Class M-3 and Class M-4
Certificates and
(II) in no event will the Class M-5 Principal Distribution Amount
with respect
to any Distribution Date exceed the Class M-5 Certificate Principal
Balance.
Class M-5 Unpaid Realized Loss Amount: As of any Distribution Date,
the
excess of (1) the Class M-5 Applied Realized Loss Amount over (2)
the sum of (x)
all distributions in reduction of the Class M-5 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of such Class M-5 Certificates pursuant to the
last sentence
of the definition of "Certificate Principal Balance."
Class M-6 Applied Realized Loss Amount: As of any Distribution
Date, the
sum of all Applied Realized Loss Amounts with respect to the
Mortgage Loans
which have been applied to the reduction of the Certificate
Principal Balance of
the Class M-6 Certificates.
Class M-6 Certificate: Any Certificate designated as a "Class
M-6
Certificate" on the face thereof, in the form of Exhibit A hereto,
representing
the right to distributions as set forth herein.
Class M-6 Certificate Principal Balance: As of any date of
determination,
the aggregate Certificate Principal Balance of the Class M-6
Certificates.
Class M-6 Current Interest: As of any Distribution Date, the
interest
accrued during the related Accrual Period at the Class M-6
Pass-Through Rate on
the Class M-6 Certificate Principal Balance as of such Distribution
Date plus
the portion of any previous distributions on such Class in respect
of Current
Interest or Class M-6 Interest Carry Forward Amount that is
recovered as a
voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-6
Certificates.
Class M-6 Interest Carry Forward Amount: As of any Distribution
Date, the
sum of (1) the excess of (A) the Class M-6 Current Interest with
respect to
prior Distribution Dates over (B) the amount actually distributed
to the Class
M-6 Certificates with respect to interest on such prior
Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable
law) at the
Class M-6 Pass-Through Rate for the related Accrual Period.
Class M-6 Margin: As of any Distribution Date up to and including
the
Initial Optional Termination Date, 0.4700% per annum and, as of any
Distribution
Date after the Initial Optional Termination Date, 0.7050% per
annum.
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Class M-6 Pass-Through Rate: For the first Distribution Date,
5.79375% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class M-6 Margin, (2) the Weighted Average Available Funds
Cap for such
Distribution Date and (3) the Weighted Average Maximum Rate Cap for
such
Distribution Date.
Class M-6 Principal Distribution Amount: With respect to any
Distribution
Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount
for such Distribution Date if the Class A Certificate Principal
Balance, Class
M-1 Certificate Principal Balance, Class M-2 Certificate Principal
Balance,
Class M-3 Certificate Principal Balance, Class M-4 Certificate
Principal Balance
and Class M-5 Certificate Principal Balance have been reduced to
zero and a
Stepdown Trigger Event exists, or as long as a Stepdown Trigger
Event does not
exist, the excess of (1) the sum of (A) the Class A Certificate
Principal
Balance (after taking into account distributions of the Class A
Principal
Distribution Amount on such Distribution Date), (B) the Class M-1,
Class M-2 and
Class M-3 Certificate Principal Balance (after taking into account
distributions
of the Class M-1/M-2/M-3 Principal Distribution Amount on such
Distribution
Date), (C) the Class M-4 Certificate Principal Balance (after
taking into
account distributions of the Class M-4 Principal Distribution
Amount on such
Distribution Date), (D) the Class M-5 Certificate Principal Balance
(after
taking into account distributions of the Class M-5 Principal
Distribution Amount
on such Distribution Date), and (E) the Class M-6 Certificate
Principal Balance
immediately prior to such Distribution Date over (2) the lesser of
(A) 83.60% of
the Stated Principal Balances of the Mortgage Loans as of such
Distribution Date
and (B) the excess of the Stated Principal Balances for the
Mortgage Loans as of
such Distribution Date over the Minimum Required
Overcollateralization Amount.
Notwithstanding the foregoing, (I) on any Distribution Date prior
to the
Stepdown Date on which the Certificate Principal Balance of each
Class of Class
A Certificates, the Class M-1 Certificates, the Class M-2
Certificates, the
Class M-3 Certificates, the Class M-4 Certificates and the Class
M-5
Certificates has been reduced to zero, the Class M-6 Principal
Distribution
Amount will equal the lesser of (x) the outstanding Certificate
Principal
Balance of the Class M-6 Certificates and (y) 100% of the Principal
Distribution
Amount remaining after any distributions on such Class A, Class
M-1, Class M-2,
Class M-3, Class M-4 and Class M-5 Certificates and (II) in no
event will the
Class M-6 Principal Distribution Amount with respect to any
Distribution Date
exceed the Class M-6 Certificate Principal Balance.
Class M-6 Unpaid Realized Loss Amount: As of any Distribution Date,
the
excess of (1) the Class M-6 Applied Realized Loss Amount over (2)
the sum of (x)
all distributions in reduction of the Class M-6 Unpaid Realized
Loss Amounts on
all previous Distribution Dates and (y) all increases in the
Certificate
Principal Balance of such Class M-6 Certificates pursuant to the
last sentence
of the definition of "Certificate Principal Balance."
Class P Certificate: Any Certificate designated as a Class P
Certificate on
the face thereof, executed by the Securities Administrator and
authenticated by
the Securities Administrator in substantially the form set forth in
Exhibit A,
representing the right to distributions as set forth herein.
Class Payment Shortfall: As defined in Section 2.07(d)(ii)
herein.
Class R Certificate: The Class R Certificate executed by the
Securities
Administrator and authenticated by the Securities Administrator in
substantially
the form set forth in Exhibit A.
Class R Certificate Principal Balance: As of any date of
determination, the
aggregate Certificate Principal Balance of the Class R
Certificate.
Class R Current Interest: As of any Distribution Date, the interest
accrued
during the related Accrual Period at the Class R Pass-Through Rate
on the Class
R Certificate Principal Balance as of such Distribution Date plus
the portion of
any previous distributions on such Class in respect of Current
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<PAGE>
Interest or a Class R Interest Carry Forward Amount that is
recovered as a
voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class R
Certificate. For
purposes of calculating interest, principal distributions on a
Distribution Date
will be deemed to have been made on the first day of the Accrual
Period in which
such Distribution Date occurs.
Class R Interest Carry Forward Amount: As of any Distribution Date,
the sum
of (1) the excess of (A) the Class R Current Interest with respect
to prior
Distribution Dates over (B) the amount actually distributed to the
Class R
Certificate with respect to interest on such prior Distribution
Dates and (2)
interest on such excess (to the extent permitted by applicable law)
at the Class
R Pass-Through Rate for the related Accrual Period.
Class R Margin: As of any Distribution Date up to and including the
Initial
Optional Termination Date for the Certificates, 0.1500% per annum
and, as of any
Distribution Date after the Initial Optional Termination Date,
0.3000% per
annum.
Class R Pass-Through Rate: For the first Distribution Date,
5.47375% per
annum. As of any Distribution Date thereafter, the least of (1)
One-Month LIBOR
plus the Class R Margin, (2) the Class A-1 Available Funds Cap for
such
Distribution Date and (3) the Class A-1 Maximum Rate Cap for such
Distribution
Date.
Class SWR Interest: The sole class of "residual interest" in the
SWAP
REMIC.
Closing Date: September 28, 2006.
Code: The Internal
Revenue Code of 1986, including any successor or
amendatory provisions.
Collection Accounts: The separate Eligible Accounts created and
initially
maintained by each Servicer pursuant to Section 3.05(d) in the name
of the
Trustee for the benefit of the Certificateholders and designated,
"Wilshire
Credit Corporation, as servicer for Citibank, N.A., as trustee, in
trust for
registered holders of Merrill Lynch Mortgage Investors Trust,
Mortgage Loan
Asset-Backed Certificates, Series 2006-HE5" and "IndyMac Bank
F.S.B., as
servicer for Citibank N.A., as trustee, in trust for registered
holders of
Merrill Lynch Mortgage Investors Trust, Mortgage Loan Asset-Backed
Certificates,
Series 2006-HE5". Funds in each Collection Account shall be held in
trust for
the Certificateholders for the uses and purposes set forth in this
Agreement.
Combined Loan-to-Value Ratio: The fraction, expressed as a
percentage, the
numerator of which is the sum of (1) the original principal balance
of the
related Mortgage Loan and (2) any outstanding principal balances of
Mortgage
Loans the liens on which are senior to the lien on such related
Mortgage Loan
(such sum calculated at the date of origination of such related
Mortgage Loan)
and the denominator of which is the lesser of (A) the Appraised
Value of the
related Mortgaged Property and (B) the sales price of the related
Mortgaged
Property at time of origination.
Commission: The Securities and Exchange Commission.
Compensating Interest: For any Distribution Date and all
Principal
Prepayments in full in respect of a Mortgage Loan that are received
during the
period from the first day of the related Prepayment Period through
the last day
of the calendar month preceding such Distribution Date, a payment
made by a
Servicer in an amount not to exceed the product of (a) one-twelfth
of 0.25% and
(b) the aggregate Stated Principal Balance of the Mortgage Loans
for such
Distribution Date, equal to the amount of interest at the Net
Mortgage Rate for
that Mortgage Loan from the date of prepayment through the 30th day
of such
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preceding calendar month; provided that any month consisting of
less than 30
days shall be deemed to consist of 30 days.
Corresponding Certificates: With respect to the Class LTA-1
Interest, the
Class A-1 and Class R Certificates. With respect to the Class
LTA-2A Interest,
the Class A-2A Certificates. With respect to the Class LTA-2B
Interest, the
Class A-2B Certificates. With respect to the Class LTA-2C Interest,
the Class
A-2C Certificates. With respect to the Class LTA-2D Interest, the
Class A-2D
Certificates. With respect to the Class LTM-1 Interest, the Class
M-1
Certificates. With respect to the Class LTM-2 Interest, the Class
M-2
Certificates. With respect to the Class LTM-3 Interest, the Class
M-3
Certificates. With respect to the Class LTM-4 Interest, the Class
M-4
Certificates. With respect to the Class LTM-5 Interest, the Class
M-5
Certificates. With respect to the Class LTM-6 Interest, the Class
M-6
Certificates. With respect to the Class LTB-1 Interest, the Class
B-1
Certificates. With respect to the Class LTB-2 Interest, the Class
B-2
Certificates. With respect to the Class LTB-3 Interest, the Class
B-3
Certificates.
Corresponding REMIC Regular
Interest: For each Class of Certificates, the
interest in the Upper Tier REMIC listed on the same row in the
table entitled
"Upper Tier REMIC" in the Preliminary Statement.
Current Interest: Any of the Class A-1 Current Interest, the Class
A-2A
Current Interest, the Class A-2B Current Interest, the Class A-2C
Current
Interest, the Class A-2D Current Interest, the Class R Current
Interest, the
Class M-1 Current Interest, the Class M-2 Current Interest, the
Class M-3
Current Interest, the Class M-4 Current Interest, the Class M-5
Current
Interest, the Class M-6 Current Interest, the Class B-1 Current
Interest, the
Class B-2 Current Interest, the Class B-3 Current Interest and the
Class C
Current Interest.
Custodian: LaSalle Bank National Association.
Cut-off Date: September 1, 2006.
Cut-off Date Principal Balance: As to any Mortgage Loan, the
unpaid
principal balance thereof as of the close of business on the
calendar day
immediately preceding the Cut-off Date after application of all
payments of
principal due on or prior to the Cut-off Date, whether or not
received, and all
Principal Prepayments received prior to the Cut-off Date, but
without giving
effect to any installments of principal received in respect of Due
Dates after
the Cut-off Date.
Defaulted Swap Termination Payment: Any payment required to be made
by the
Supplemental Interest Trust to the Swap Counterparty pursuant to
the Swap
Agreement as a result of an event of default under the Swap
Agreement with
respect to which the Swap Counterparty is the defaulting party or a
termination
event (including a Downgrade Termination Event) under that
agreement (other than
illegality or a tax event) with respect to which the Swap
Counterparty is the
sole Affected Party (as defined in the Swap Agreement).
Definitive Certificates: As defined in Section 5.06.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced
by a
Replacement Mortgage Loan.
Delinquent: A Mortgage Loan is "delinquent" if any payment due
thereon is
not made pursuant to the terms of such Mortgage Loan by the close
of business on
the day such payment is scheduled to be due. A Mortgage Loan is "30
days
delinquent" if such payment has not been received by the close of
business on
the corresponding day of the month immediately succeeding the month
in which
such
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<PAGE>
payment was due, or, if there is no such corresponding day (e.g.,
as when a
30-day month follows a 31-day month in which a payment was due on
the 31st day
of such month), then on the last day of such immediately succeeding
month. With
respect to any Mortgage Loan due on any day other than the first
day of the
month, such Mortgage Loan shall be deemed to be due on the first
day of the
immediately succeeding month. Similarly for "60 days delinquent,"
"90 days
delinquent" and so on.
Denomination: With respect to each Certificate, the amount set
forth on the
face thereof as the "Initial Principal Balance of this
Certificate."
Deposit Date: With respect to each Distribution Date, the Business
Day
immediately preceding such Distribution Date.
Depositor: Merrill Lynch Mortgage Investors, Inc., a Delaware
corporation,
or any successor in interest.
Depository: The initial
Depository shall be The Depository Trust Company
("DTC"), the nominee of which is Cede & Co., or any other
organization
registered as a "clearing agency" pursuant to Section 17A of the
Securities
Exchange Act of 1934, as amended. The Depository shall initially be
the
registered Holder of the Book-Entry Certificates. The Depository
shall at all
times be a "clearing corporation" as defined in Section 8-102(3) of
the Uniform
Commercial Code of the State of New York.
Depository Agreement: With respect to Classes of Book-Entry
Certificates,
the agreement between the Securities Administrator and the initial
Depository.
Depository Participant: A broker, dealer, bank or other
financial
institution or other Person for whom from time to time a Depository
effects
book-entry transfers and pledges of securities deposited with the
Depository.
Designated Transaction: A transaction in which the assets
underlying the
Certificates consist of single-family residential, multi-family
residential,
home equity, manufactured housing and/or commercial mortgage
obligations that
are secured by single-family residential, multi-family residential,
commercial
real property or leasehold interests therein.
Determination Date: With respect to any Distribution Date, the 15th
day of
the month of such Distribution Date or, if such 15th day is not a
Business Day,
the immediately preceding Business Day.
Disqualified Organization: (1) the United States, any state or
political
subdivision thereof, any foreign government, any international
organization, or
any agency or instrumentality of any of the foregoing, (2) any
organization
(other than a cooperative described in Section 521 of the Code)
which is exempt
from tax under Chapter 1 of Subtitle A of the Code unless such
organization is
subject to the tax imposed by Section 511 of the Code and (3) any
organization
described in Section 1381(a)(2)(C) of the Code.
Distribution Date: The 25th day of each calendar month, or if such
25th day
is not a Business Day, the next succeeding Business Day, commencing
in October
2006.
Downgrade Termination Event: An event whereby (x) the Swap
Counterparty (or
its guarantor) ceases to have short term unsecured and/or long term
debt ratings
at least equal to the levels specified in the Swap Agreement, and
(y) at least
one of the following events has not occurred (except to the extent
otherwise
approved by the Rating Agencies): (i) within the time period
specified in the
Swap Agreement with respect to such downgrade, the Swap
Counterparty shall
transfer the Swap Agreement, in whole, but
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<PAGE>
not in part, to a substitute swap counterparty that satisfies the
requirements
set forth in the Swap Agreement, subject to the satisfaction of the
Rating
Agency Condition or (ii) within the time period specified in the
Swap Agreement
with respect to such downgrade, the Swap Counterparty shall
collateralize its
exposure to the Trust Fund pursuant to an ISDA Credit Support
Annex, subject to
the satisfaction of the Rating Agency Condition; provided that such
ISDA Credit
Support Annex shall be made a credit support document for the Swap
Counterparty
pursuant to an amendment to the Swap Agreement.
Due
Date: With respect to any Distribution Date and any Mortgage Loan,
the
day during the related Due Period on which a Scheduled Payment is
due.
Due
Period: With respect to any Distribution Date, the period beginning
on
the second day of the calendar month preceding the calendar month
in which such
Distribution Date occurs and ending on the first day of the month
in which such
Distribution Date occurs.
Eligible Account: An account that is (1) maintained with a
depository
institution the long-term unsecured debt obligations of which are
rated by each
Rating Agency in one of its two highest rating categories, or (2)
maintained
with the corporate trust department of a bank which (A) has a
rating of at least
Baa3 or P-3 by Moody's and (B) is either the Depositor or the
corporate trust
department of a national banking association or banking corporation
which has a
rating of at least A-1 by S&P or F1 by Fitch, or (iii) an
account or accounts
the deposits in which are fully insured by the FDIC, or (iv) an
account or
accounts, acceptable to each Rating Agency without reduction or
withdrawal of
the rating of any Class of Certificates, as evidenced in writing,
by a
depository institution in which such accounts are insured by the
FDIC (to the
limit established by the FDIC), the uninsured deposits in which
accounts are
otherwise secured such that, as evidenced by an Opinion of Counsel
delivered to
and acceptable to the Securities Administrator, the Trustee and
each Rating
Agency, the Certificateholders have a claim with respect to the
funds in such
account and a perfected first security interest against any
collateral (which
shall be limited to Permitted Investments) securing such funds that
is superior
to claims of any other depositors or creditors of the depository
institution
with which such account is maintained, or (v) maintained at an
eligible
institution whose commercial paper, short-term debt or other
short-term deposits
are rated at least A-1+ by S&P and F-1+ by Fitch, or (vi)
maintained with a
federal or state chartered depository institution the deposits in
which are
insured by the FDIC to the applicable limits and the short-term
unsecured debt
obligations of which (or, in the case of a depository institution
that is a
subsidiary of a holding company, the short-term unsecured debt
obligations of
such holding company) are rated A-1 by S&P, F-1 by Fitch or
Prime-1 by Moody's
at the time any deposits are held on deposit therein, or (vii) a
segregated
trust account or accounts maintained with the corporate trust
department of a
federal or state chartered depository institution or trust company
having
capital and surplus of not less than $50,000,000 or (viii)
otherwise acceptable
to each Rating Agency, as evidenced by a letter from each Rating
Agency to the
Securities Administrator and the Trustee.
ERISA: The Employee Retirement Income Security Act of 1974,
including any
successor or amendatory provisions.
ERISA-Qualifying Underwriting: A best efforts or firm
commitment
underwriting or private placement that would satisfy the
requirements would
satisfy the requirements of Prohibited Transaction Exemption 90-29,
Exemption
Application No. D-8012, 55 Fed. Reg. 21459 (1990), as amended,
granted by the
United States Department of Labor (or any other applicable
underwriter's
exemption granted by the United States Department of Labor),
except, in relevant
part, for the requirement that the certificates have received a
rating at the
time of acquisition that is in one of the three (or four, in the
case of a
"designated transaction") highest generic rating categories by at
least one of
S&P, Moody's or Fitch.
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<PAGE>
ERISA Restricted Certificates: The Class C Certificates and Class
P
Certificates and any other Certificate, as long as the acquisition
and holding
of such Certificate is not covered by and exempt under an
underwriter's
exemption.
Event of Default: As defined in Section 7.01 hereof.
Excess Interest: On any Distribution Date, for each Class of the
Class A,
Class M and Class B Certificates, the excess, if any, of (1) the
amount of
interest such Class of Certificates is entitled to receive on such
Distribution
Date over (2) the amount of interest such Class of Certificates
would have been
entitled to receive on such Distribution Date at an interest rate
equal to the
REMIC Pass-Through Rate.
Excess Proceeds: With respect to any Liquidated Loan, any
Liquidation
Proceeds that are in excess of the sum of (1) the unpaid principal
balance of
such Liquidated Loan as of the date of such liquidation plus (2)
interest at the
Mortgage Rate from the Due Date as to which interest was last paid
or advanced
to Certificateholders (and not reimbursed to the related Servicer)
up to the Due
Date in the month in which such Liquidation Proceeds are required
to be
distributed on the unpaid principal balance of such Liquidated Loan
outstanding
during each Due Period as to which such interest was not paid or
advanced.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Extra Principal
Distribution Amount: With respect to any Distribution Date,
(1) prior to the Stepdown Date, the excess of (A) the sum of (i)
the Aggregate
Certificate Principal Balance immediately preceding such
Distribution Date
reduced by the Principal Funds with respect to such Distribution
Date and (ii)
$57,804,922.86 and over (B) the aggregate Stated Principal Balance
of the
Mortgage Loans as of such Distribution Date and (2) on and after
the Stepdown
Date, (A) the sum of (x) the Aggregate Certificate Principal
Balance immediately
preceding such Distribution Date, reduced by the Principal Funds
with respect to
such Distribution Date and (y) the greater of (a) 8.40% of the
aggregate Stated
Principal Balance of the Mortgage Loans and (b) the Minimum
Required
Overcollateralization Amount less (B) the aggregate Stated
Principal Balance of
the Mortgage Loans as of such Distribution Date; provided, however,
that if on
any Distribution Date a Stepdown Trigger Event is in effect, the
Extra Principal
Distribution Amount will not be reduced to the applicable
percentage of the
then-current aggregate Stated Principal Balance of the Mortgage
Loans (and will
remain fixed at the applicable percentage of the aggregate Stated
Principal
Balance of the Mortgage Loans as of the Due Date immediately prior
to the
Stepdown Trigger Event) until the next Distribution Date on which
the Stepdown
Trigger Event is not in effect.
Fannie Mae: A federally chartered and privately owned corporation
organized
and existing under the Federal National Mortgage Association
Charter Act, or any
successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
Fitch: Fitch, Inc., or any successor in interest.
Fixed Rate Mortgage Loan: A Mortgage Loan identified in the
Mortgage Loan
Schedule as having a Mortgage Rate that is fixed.
Floating Rate Certificate Carryover: With respect to a Distribution
Date,
in the event that the Pass-Through Rate for a class of Offered
Certificates is
based upon the related Available Funds Cap or the related Maximum
Rate Cap, the
sum of (A) the excess of (1) the amount of interest that such Class
would have
been entitled to receive on such Distribution Date had the
Pass-Through Rate for
that Class
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not been calculated based on the related Available Funds Cap or the
related
Maximum Rate Cap, up to but not exceeding greater of (x) the
related Maximum
Rate Cap or (y) the sum of (i) the related Available Funds Cap and
(ii) the
product of (A) a fraction, the numerator of which is 360 and the
denominator of
which is the actual number of days in the related Accrual Period
and (B) the sum
of (x) the quotient obtained by dividing (I) an amount equal to the
proceeds, if
any, payable under the related Cap Contract with respect to such
Distribution
Date by (II) the aggregate Certificate Principal Balance of each of
the Classes
of Certificates to which such Cap Contract relates for such
Distribution Date
and (y) the quotient obtained by dividing (I) an amount equal to
any Net Swap
Payments owed by the Swap Counterparty for such Distribution Date
by (II) the
aggregate Stated Principal Balance of the Mortgage Loans as of the
immediately
preceding Distribution Date over (2) the amount of interest such
class was
entitled to receive on such Distribution Date based on the related
Available
Funds Cap, (B) the unpaid portion of any such excess from prior
Distribution
Dates (and interest accrued thereon at the then applicable
Pass-Through Rate for
such class, without giving effect to the applicable Available Funds
Cap or the
related Maximum Rate Cap) and (C) any amount previously distributed
with respect
to Floating Rate Certificate Carryover for such Class that is
recovered as a
voidable preference by a trustee in bankruptcy.
Freddie Mac: A corporate instrumentality of the United States
created and
existing under Title III of the Emergency Home Finance Act of 1970,
as amended,
or any successor thereto.
Grantor Trusts: The grantor trusts described in Section 2.07
hereof.
Gross Margin: The percentage set forth in the related Mortgage Note
for
each of the Adjustable Rate Mortgage Loans which is to be added to
the
applicable index for use in determining the Mortgage Rate on each
Adjustment
Date, and which is set forth in the Mortgage Loan Schedule for each
Adjustable
Rate Mortgage Loan.
Group One: The portion of the Mortgage Pool identified as "Group
One" in
the Prospectus Supplement.
Group One Mortgage Loan: Any Mortgage Loan at any time identified
in the
Group One Mortgage Loan Schedule attached hereto as Exhibit
B-2.
Group One Net WAC: The Net WAC of Group One.
Group One Principal Distribution Amount: As of any Distribution
Date, the
amount equal to the lesser of (i) the aggregate Certificate
Principal Balance of
the Class A-1 and Class R Certificates and (ii) the product of (x)
the Group One
Principal Distribution Percentage and (y) the Class A Principal
Distribution
Amount; provided, however, that with respect to any Distribution
Date on which
the Class A-1 and Class R Certificates are outstanding and the
Certificate
Principal Balance of the Class A-2 Certificates has been reduced to
zero, the
Group One Principal Distribution Amount will equal the Class A
Principal
Distribution Amount.
Group One Principal Distribution Percentage: With respect to
any
Distribution Date, a fraction expressed as a percentage, the
numerator of which
is the amount of Principal Funds received with respect to Mortgage
Loans in
Group One and the denominator of which is the amount of Principal
Funds received
from all of the Mortgage Loans in the mortgage pool.
Group Two: The portion of the Mortgage Pool identified as "Group
Two" in
the Prospectus Supplement.
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Group Two Mortgage Loan: Any Mortgage Loan at any time identified
in the
Group Two Mortgage Loan Schedule attached hereto as Exhibit
B-3.
Group Two Net WAC: The Net WAC of Group Two.
Group Two Principal Distribution Amount: As of any Distribution
Date, the
amount equal to the lesser of (i) the aggregate Certificate
Principal Balance of
the Class A-2 Certificates and (ii) the product of (x) the Group
Two Principal
Distribution Percentage and (y) the Class A Principal Distribution
Amount;
provided, however, that (A) with respect to any Distribution Date
on which the
Class A-2 Certificates are outstanding and the Certificate
Principal Balances of
the Class A-1 and Class R Certificates is reduced to zero, the
Group One
Principal Distribution Amount in excess of the amount necessary to
reduce the
Certificate Principal Balance of the Class A-1 Certificates and
Class R
Certificates to zero will be applied to increase the Group Two
Principal
Distribution Amount and (B) with respect to any Distribution Date
thereafter,
the Group Two Principal Distribution Amount will equal the Class A
Principal
Distribution Amount.
Group Two Principal Distribution Percentage: With respect to
any
Distribution Date, a fraction expressed as a percentage, the
numerator of which
is the amount of Principal Funds received with respect to Mortgage
Loans in
Group Two and the denominator of which is the amount of Principal
Funds received
from all of the Mortgage Loans in the mortgage pool.
Indenture: An indenture relating to the issuance of notes
guaranteed by the
NIMs Insurer.
Initial Adjustment Date: As to any Adjustable Rate Mortgage Loan,
the first
Adjustment Date following the origination of such Mortgage
Loan.
Initial Certificate Principal Balance: With respect to any
Certificate, the
Certificate Principal Balance of such Certificate or any
predecessor Certificate
on the Closing Date as set forth in Section 5.01 hereof.
Initial Mortgage Rate: As to each Mortgage Loan, the Mortgage Rate
in
effect prior to the Initial Adjustment Date.
Initial Optional Termination Date: The first Distribution Date on
which the
aggregate Stated Principal Balance of the Mortgage Loans (or if
such Mortgage
Loan is an REO Property, the fair market value of such REO
Property) is equal to
or less than 10% of the aggregate Stated Principal Balance of the
Mortgage Loans
as of the Cut-off Date.
Insurance Policy: With respect to any Mortgage Loan or the
related
Mortgaged Property included in the Trust Fund, any insurance
policy, including
all riders and endorsements thereto in effect with respect to such
Mortgage Loan
or Mortgaged Property, including any replacement policy or policies
for any
insurance policies.
Insurance Proceeds: Proceeds paid in respect of a Mortgage Loan or
the
related Mortgaged Property pursuant to any Insurance Policy or any
other
insurance policy covering such Mortgage Loan or Mortgaged Property,
to the
extent such proceeds are payable to the mortgagee under the
Mortgage, a Servicer
or the trustee under the deed of trust and are not applied to the
restoration of
the related Mortgaged Property or released either to the Mortgagor
or to the
holder of a senior lien on the related Mortgaged Property in
accordance with the
procedures that the related Servicer would follow in servicing
mortgage loans
held for its own account, in each case other than any amount
included in such
Insurance Proceeds in respect of Insured Expenses.
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Insured Expenses: Expenses covered by an Insurance Policy or any
other
insurance policy with respect to a Mortgage Loan or the related
Mortgaged
Property.
Interest Carry Forward Amount: Any of the Class A-1 Interest Carry
Forward
Amount, the Class A-2A Interest Carry Forward Amount, the Class
A-2B Interest
Carry Forward Amount, the Class A-2C Interest Carry Forward Amount,
the Class
A-2D Interest Carry Forward Amount, the Class R Interest Carry
Forward Amount,
the Class M-1 Interest Carry Forward Amount, the Class M-2 Interest
Carry
Forward Amount, the Class M-3 Interest Carry Forward Amount, the
Class M-4
Interest Carry Forward Amount, the Class M-5 Interest Carry Forward
Amount, the
Class M-6 Interest Carry Forward Amount, the Class B-1 Interest
Carry Forward
Amount, the Class B-2 Interest Carry Forward Amount, the Class B-3
Interest
Carry Forward Amount or the Class C Interest Carry Forward Amount,
as the case
may be.
Interest Determination Date: With respect to the Offered
Certificates, (i)
for any Accrual Period other than the first Accrual Period, the
second LIBOR
Business Day preceding the commencement of such Accrual Period and
(ii) for the
first Accrual Period, September 28, 2006.
Interest Funds: With respect to any Distribution Date, the sum,
without
duplication, of (1) all scheduled interest due during the related
Due Period and
received before the related Servicer Remittance Date or advanced on
or before
the related Servicer Remittance Date less the Servicing Fee, (2)
all Advances
relating to interest with respect to the Mortgage Loans, (3) all
Compensating
Interest with respect to the Mortgage Loans, (4) Liquidation
Proceeds with
respect to the Mortgage Loans (to the extent such Liquidation
Proceeds relate to
interest) collected during the related Prepayment Period, (5) all
proceeds of
any purchase pursuant to Section 2.02 or 2.03 during the related
Prepayment
Period or pursuant to Section 9.01 not later than the related
Determination Date
(to the extent that such proceeds relate to interest) less the
Servicing Fee and
(6) all Prepayment Charges received with respect to the Mortgage
Loans during
the related Prepayment Period, less (A) all Non-Recoverable
Advances relating to
interest and (B) other amounts reimbursable (including without
limitation
indemnity payments) to the Servicers, the Master Servicer, the
Securities
Administrator and the Trustee pursuant to this Agreement allocable
to interest.
Issuing Entity: Merrill Lynch Mortgage Investors Trust, Series
2006-HE5.
Latest Possible Maturity Date: The latest maturity date for any
Mortgage
Loan in the Trust Fund plus one year.
LIBOR Business Day: Any day on which banks in the City of London,
England,
Chicago, Illinois and New York City, U.S.A. are open and conducting
transactions
in foreign currency and exchange.
LIBOR Certificates: The Class A, Class M and Class B
Certificates.
Liquidated Loan: With respect to any Distribution Date, a
defaulted
Mortgage Loan that either (a) has been liquidated through
deed-in-lieu of
foreclosure, foreclosure sale, trustee's sale or other realization
as provided
by applicable law governing the real property subject to the
related Mortgage
and any security agreements and as to which the related Servicer
has certified
(in accordance with Section 3.12) in the related Prepayment Period
that it has
received all amounts it expects to receive in connection with such
liquidation
or (b) as to which is not a first lien Mortgage Loan and is
delinquent 180 days
or longer, the related Servicer has certified in a certificate of
an officer of
the related Servicer delivered to the Depositor and Master Servicer
that it does
not believe that there is a reasonable likelihood that any further
net proceeds
will be received or recovered with respect to such Mortgage
Loan.
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Liquidation Proceeds: Amounts, including Insurance Proceeds,
received in
connection with the partial or complete liquidation of Mortgage
Loans, whether
through trustee's sale, foreclosure sale, sale by a Servicer
pursuant to this
Agreement or otherwise or amounts received in connection with any
condemnation
or partial release of a Mortgaged Property and any other proceeds
received in
connection with an REO Property, less the sum of related
unreimbursed Advances,
Servicing Fees, Servicing Advances and any other expenses related
to such
Mortgage Loan.
Loan-to-Value Ratio: With respect to any Mortgage Loan, the
fraction,
expressed as a percentage, the numerator of which is the original
principal
balance of the related Mortgage Loan and the denominator of which
is the lesser
of (X) the Appraised Value of the related Mortgaged Property and
(Y) the sales
price of the related Mortgaged Property at the time of
origination.
Losses: Any losses, claims, damages, liabilities or expenses
collectively.
Lower Tier REMIC: As described in the Preliminary Statement and
Section
2.07.
Lower Tier REMIC Interests: Each of the Class LTA-1 Interest, the
Class
LTA-2A Interest, the Class LTA-2B Interest, the Class LTA-2C
Interest, the Class
LTA-2D Interest, the Class LTM-1 Interest, the Class LTM-2
Interest, the Class
LTM-3 Interest, the Class LTM-4 Interest, the Class LTM-5 Interest,
the Class
LTM-6 Interest, the Class LTB-1 Interest, the Class LTB-2 Interest,
the Class
LTB-3 Interest, the Class LTIX Interest, the Class LTIIX Interest,
the Class
LTII1A Interest, the Class LTII1B Interest, the Class LTII2A
Interest, the Class
LTII2B Interest, the Class LT-IO Interest and the Class LTR
Interest.
Lower Tier REMIC I Marker Interests: Each of the classes of Lower
Tier
REMIC Regular Interests other than the Class LTIX Interest, the
Class LTIIX
Interest, the Class LTII1A Interest, the Class LTII1B Interest, the
Class LTII2A
Interest, the Class LTII2B Interest and the Class LT-IO
Interest.
Lower Tier REMIC II Marker Interests: Each of the Class LTII1A
Interest,
the Class LTII1B Interest, the Class LTII2A Interest and the Class
LTII2B
Interest.
Lower Tier REMIC Regular Interests: Each of the Lower Tier REMIC
Interests
other than the Class LTR Interest.
Lower Tier REMIC Subordinated Balance Ratio: The ratio of (i) the
principal
balance of the Class LTII1A Interest to (ii) the principal balance
of the Class
LTII2A Interest that is equal to the ratio of (i) the excess of (A)
the
aggregate Stated Principal Balance of Group One over (B) the
current Certificate
Principal Balance of the Class A-1 and Class R Certificates to (ii)
the excess
of (A) the aggregate Stated Principal Balance of Group Two over (B)
the current
Certificate Principal Balance of the Class A-2 Certificates.
Master Servicer: LaSalle Bank National Association, a national
banking
association, or any successor in interest.
Master Servicer Collection Account: The separate Eligible Account
created
and initially maintained by the Master Servicer pursuant to Section
3.05(e) in
the name of the Trustee for the benefit of the Certificateholders
and
designated, "LaSalle Bank National Association, as master servicer
for Citibank,
N.A., as trustee, in trust for registered holders of Merrill Lynch
Mortgage
Investors Trust, Mortgage Loan Asset-Backed Certificates, Series
2006-HE5".
Funds in the Master Servicer Collection Account shall be held in
trust for the
Certificateholders for the uses and purposes set forth in this
Agreement.
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Maximum Mortgage Rate: With respect to each Adjustable Rate
Mortgage Loan,
the maximum rate of interest set forth as such in the related
Mortgage Note and
with respect to each Fixed Rate Mortgage Loan, the rate of interest
set forth in
the related Mortgage Note.
Maximum Rate Cap: Any of the Class A-1 Maximum Rate Cap, the Class
A-2
Maximum Rate Cap or the Weighted Average Maximum Rate Cap.
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation
organized and existing under the laws of the State of Delaware, or
any successor
thereto.
MERS
Loan: Any Mortgage Loan registered with MERS on the MERS
System.
MERS
System: The system of recording transfers of mortgage
electronically
maintained by MERS.
MIN:
The loan number for any MERS Loan.
Minimum Mortgage Rate: With respect to each Adjustable Rate
Mortgage Loan,
the minimum rate of interest set forth as such in the related
Mortgage Note.
Minimum Required Overcollateralization Amount: An amount equal to
the
product of (x) 0.50% and (y) the Stated Principal Balance of the
Mortgage Loans
as of the Cut-off Date.
MLML: Merrill Lynch Mortgage Lending, Inc., a Delaware corporation,
or its
successors in interest.
MOM
Loan: Any Mortgage Loan as to which MERS is acting as mortgagee,
solely
as nominee for the originator of such Mortgage Loan and its
successors and
assigns.
Monthly Statement: The statement delivered to the
Certificateholders
pursuant to Section 4.05.
Moody's: Moody's Investors Service, Inc. or any successor in
interest.
Mortgage: With respect to a Mortgage Loan, the mortgage, deed of
trust or
other instrument with all riders thereto creating a first or second
lien or a
first or second priority ownership interest in an estate in fee
simple in real
property securing a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01
hereof
pertaining to a particular Mortgage Loan and any additional
documents delivered
to the Trustee or the Custodian on its behalf to be added to the
Mortgage File
pursuant to this Agreement.
Mortgage Group: Either of Group One or Group Two.
Mortgage Loan Schedule: The list of Mortgage Loans (as from time to
time
amended by the Custodian on behalf of the Trustee to reflect the
deletion of
Deleted Mortgage Loans and the addition of Replacement Mortgage
Loans pursuant
to the provisions of this Agreement) transferred to the Trustee as
part of the
Trust Fund and from time to time subject to this Agreement,
attached hereto as
Exhibits B-1, B-2 and B-3, setting forth the following information
with respect
to each Mortgage Loan:
(i) the loan
number;
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(ii) the borrower name and address;
(iii) the unpaid principal balance of the Mortgage Loans;
(iv) the Initial Mortgage Rate;
(v) the original
maturity date and the months remaining before
maturity date;
(vi) the original principal balance;
(vii) the Cut-off Date Principal Balance;
(viii) the first payment due date of the Mortgage Loan;
(ix) the Loan-to-Value Ratio at origination with respect to a
first
lien Mortgage Loan, or the Combined Loan-to-Value Ratio with
respect to a second lien Mortgage Loan;
(x) a code indicating
whether the residential dwelling at the time of
origination was represented to be owner-occupied;
(xi) a code indicating the property type;
(xii) with respect to each Adjustable Rate Mortgage Loan;
(A) THE FREQUENCY OF
EACH ADJUSTMENT DATE;
(B) THE NEXT
ADJUSTMENT DATE;
(C) THE MAXIMUM
MORTGAGE RATE;
(D) THE MINIMUM
MORTGAGE RATE;
(E) THE MORTGAGE RATE
AS OF THE CUT-OFF DATE;
(F) THE RELATED
PERIODIC RATE CAP;
(G) THE GROSS
MARGIN;
(H) THE LIFETIME RATE
CAP;
(xiii) location of the related Mortgaged Property;
(xiv) a code indicating whether a Prepayment Charge is
applicable;
(A) THE PERIOD DURING
WHICH SUCH PREPAYMENT CHARGE IS IN EFFECT;
(B) THE AMOUNT OF SUCH
PREPAYMENT CHARGE;
(C) ANY LIMITATIONS OR
OTHER CONDITIONS ON THE ENFORCEABILITY OF
SUCH PREPAYMENT CHARGE; AND
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(D) ANY OTHER
INFORMATION PERTAINING TO THE PREPAYMENT CHARGE
SPECIFIED IN THE RELATED MORTGAGE NOTE;
(xv) the Credit Score and date obtained; and
(xvi) the MIN.
Mortgage Loans: Such of the mortgage loans transferred and assigned
to the
Trustee pursuant to the provisions hereof as from time to time are
held as a
part of the Trust Fund (including any REO Property), the mortgage
loans so held
being identified in the Mortgage Loan Schedule, notwithstanding
foreclosure or
other acquisition of title of the related Mortgaged Property. Any
mortgage loan
that was intended by the parties hereto to be transferred to the
Trust Fund as
indicated by such Mortgage Loan Schedule which is in fact not so
transferred for
any reason shall continue to be a Mortgage Loan hereunder until the
Purchase
Price with respect thereto has been paid to the Issuing Entity.
Mortgage Note: The original executed note or other evidence of
indebtedness
evidencing the indebtedness of a Mortgagor under a Mortgage Loan
and all
amendments, modifications and attachments thereto with all riders
attached
thereto.
Mortgage Pool: The aggregate of the Mortgage Loans identified in
the
Mortgage Loan Schedule.
Mortgaged Property: The underlying property securing a Mortgage
Loan.
Mortgage Rate: The annual rate of interest borne by a Mortgage Note
from
time to time.
Mortgagor: The obligor on a Mortgage Note.
Net
Mortgage Rate: As to each Mortgage Loan, and at any time, the per
annum
rate equal to the then current Mortgage Rate less the Servicing Fee
Rate.
Net
Rate: The per annum rate set forth in footnote 8 to the description
of
the Lower Tier REMIC in the Preliminary Statement hereto (such rate
being based
on the weighted average of the interest rates on the SWAP REMIC
Regular
Interests as adjusted and as set forth in such footnote).
Net
Swap Payment: With respect to any Distribution Date, any net
payment
(other than a Swap Termination Payment or Defaulted Swap
Termination Payment)
made by the Supplemental Interest Trust to the Swap Counterparty on
the related
Fixed Rate Payer Payment Date (as defined in the Swap Agreement) or
made by the
Swap Counterparty to the Supplemental Interest Trust on the related
Floating
Rate Payer Payment Date (as defined in the Swap Agreement). In each
case, the
Net Swap Payment shall not be less than zero.
Net
WAC: With respect to any Distribution Date and for any Mortgage
Group,
the weighted average Net Mortgage Rate for the Mortgage Loans in
such Mortgage
Group calculated based on the respective Net Mortgage Rates and the
Stated
Principal Balances of such Mortgage Loans as of the preceding
Distribution Date
(or, in the case of the first Distribution Date, as of the Cut-off
Date).
NIM
Notes: The notes to be issued pursuant to the Indenture.
NIMs
Insurer: Any of the one or more insurers, if any, that is
guaranteeing
certain payments under any NIM Notes; provided, that upon the
payment in full of
the NIM Notes, all rights of the NIMs Insurer hereunder shall
terminate.
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NIMs
Insurer Default: As defined in Section 10.13.
Non-Recoverable Advance: Any portion of an Advance previously made
or
proposed to be made by a Servicer (or Master Servicer in its
capacity as
Successor Servicer) that, in the good faith judgment of such
Servicer (or Master
Servicer in its capacity as Successor Servicer), will not or, in
the case of a
current delinquency, would not, be ultimately recoverable by such
Servicer (or
Master Servicer in its capacity as Successor Servicer) from the
related
Mortgagor, related Liquidation Proceeds or otherwise related to the
Mortgage
Loans.
Non-Recoverable Servicing Advance: Any portion of a Servicing
Advance
previously made or proposed to be made by a Servicer (or Master
Servicer in its
capacity as Successor Servicer) that, in the good faith judgment of
such
Servicer (or Master Servicer in its capacity as Successor
Servicer), will not
or, in the case of a current Servicing Advance, would not, be
ultimately
recoverable by such Servicer (or Master Servicer in its capacity as
Successor
Servicer) from the related Mortgagor, related Liquidation Proceeds
or otherwise
related to the Mortgage Loans.
Non-Supported Interest Shortfall: As defined in Section 4.02.
Offered Certificates: The Class A, Class M and Class B
Certificates.
Officer's Certificate: A certificate (1) signed by the Chairman of
the
Board, the Vice Chairman of the Board, the President, a vice
president (however
denominated), an Assistant Vice President, the Treasurer, the
Secretary, or one
of the assistant treasurers or assistant secretaries of the
Depositor, the
Master Servicer, the Servicers or the Securities Administrator (or
any other
officer customarily performing functions similar to those performed
by any of
the above designated officers and to whom, with respect to a
particular matter,
such matter is referred because of such officer's knowledge of and
familiarity
with a particular subject) or (2), if provided for in this
Agreement, signed by
a Servicing Officer, as the case may be, and delivered to the
Depositor, the
Master Servicer, the Servicers, the Securities Administrator or the
Trustee, as
the case may be, as required by this Agreement.
One-Month LIBOR: With respect to any Accrual Period, the rate
determined by
the Securities Administrator on the related Interest Determination
Date on the
basis of (a) the offered rates for one-month United States dollar
deposits, as
such rates appear on Telerate page 3750, as of 11:00 a.m. (London
time) on such
Interest Determination Date or (b) if such rate does not appear on
Telerate Page
3750 as of 11:00 a.m. (London time), the offered rates of the
Reference Banks
for one-month United States dollar deposits, as such rates appear
on the Reuters
Screen LIBO Page, as of 11:00 a.m. (London time) on such Interest
Determination
Date. If One-Month LIBOR is determined pursuant to clause (b)
above, on each
Interest Determination Date, One-Month LIBOR for the related
Accrual Period will
be established by the Securities Administrator as follows:
(i) If on such
Interest Determination Date two or more Reference
Banks provide such offered quotations, One-Month LIBOR for the
related Accrual Period shall be the arithmetic mean of such
offered quotations (rounded upwards if necessary to the nearest
whole multiple
of 0.03125%).
(ii) If on such Interest Determination Date fewer than two
Reference
Banks provide such offered quotations, One-Month LIBOR for the
related Accrual Period shall be the higher of (i) One-Month
LIBOR
as determined on the previous Interest Determination Date and
(ii) the Reserve Interest Rate.
Opinion of Counsel: A written opinion of counsel, who may be
counsel for
the Depositor, the Master Servicer, either Servicer, the Trustee or
the
Securities Administrator reasonably acceptable to each addressee of
such
opinion; provided, however, that with respect to Section 6.04 or
10.01, or the
interpretation or application of the REMIC Provisions, such counsel
must (1) in
fact be independent of the Depositor, the Master Servicer, either
Servicer or
the Securities Administrator, (2) not have any direct
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financial interest in the Depositor, the Master Servicer, either
Servicer, the
Trustee or the Securities Administrator or in any Affiliate of
either such
party, and (3) not be connected with the Depositor, the Master
Servicer, either
Servicer, the Trustee or the Securities Administrator as an
officer, employee,
promoter, underwriter, trustee, partner, director or person
performing similar
functions.
Optional Termination: The termination of the Trust Fund hereunder
pursuant
to clause (b) of Section 9.01 hereof.
Optional Termination Amount: The repurchase price received by
the
Securities Administrator in connection with any repurchase of all
of the
Mortgage Loans pursuant to Section 9.01.
Optional Termination Price: On any date after the Initial
Optional
Termination Date an amount equal to the sum of (i) the then
aggregate
outstanding Stated Principal Balance of the Mortgage Loans (or, if
such Mortgage
Loan is an REO Property, the fair market value of such REO
Property) plus
accrued interest thereon at the applicable Mortgage Rate through
the Due Date in
the month in which the proceeds of the auction will be distributed
on the
Certificates; (ii) any unreimbursed fees, indemnity amounts and
out-of-pocket
costs and expenses owed to the Master Servicer, the Servicers, the
Trustee or
the Securities Administrator and all unreimbursed Advances and
Servicing
Advances, in each case incurred by such party in the performance of
its
obligations; (iii) any unreimbursed costs, penalties and/or damages
incurred by
the Trust Fund in connection with any violation relating to any of
the Mortgage
Loans of any predatory or abusive lending law; and (iv) any unpaid
Net Swap
Payments and any Swap Termination Payment owed to the Swap
Counterparty.
OTS:
The Office of Thrift Supervision.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and
authenticated under
this Agreement except: (1) Certificates theretofore canceled by the
Securities
Administrator or delivered to the Securities Administrator for
cancellation; and
(2) Certificates in exchange for which or in lieu of which other
Certificates
have been executed by the Securities Administrator and delivered by
the
Securities Administrator pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Distribution Date, a Mortgage
Loan
with a Stated Principal Balance greater than zero that was not the
subject of a
Principal Prepayment in full, and that did not become a Liquidated
Loan, prior
to the end of the related Due Period.
Overcollateralization Amount: As of any date of determination, the
excess
of (1) the Stated Principal Balance of the Mortgage Loans over (2)
the
Certificate Principal Balance of the Certificates (other than the
Class P
Certificates and the Class C Certificates).
Ownership Interest: As to any Certificate, any ownership interest
in such
Certificate including any interest in such Certificate as the
Holder thereof and
any other interest therein, whether direct or indirect, legal or
beneficial.
Pass-Through Rate: With respect to any Class of Certificates,
the
corresponding Pass-Through Rate for such Class of Certificates.
Percentage Interest: With respect to:
(i) any Class, the
percentage interest in the undivided beneficial
ownership interest evidenced by such Class which shall be equal
to the Certificate Principal Balance
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of such Class divided by the aggregate Certificate Principal
Balance of all Classes; and
(ii) any Certificate, the Percentage Interest evidenced thereby of
the
related Class shall equal the percentage obtained by dividing
the
Denomination of such Certificate by the aggregate of the
Denominations of all Certificates of such Class; except that in
the case of any Class P Certificates, the Percentage Interest
with respect to such Certificate shown on the face of such
Certificate.
Periodic Rate Cap: As to each Adjustable Rate Mortgage Loan and the
related
Mortgage Note, the provision therein that limits permissible
increases and
decreases in the Mortgage Rate on any Adjustment Date.
Permitted Activities: The primary activities of the trust created
pursuant
to this Agreement which shall be:
(i) holding the
Mortgage Loans transferred from the Depositor and
other assets of the Issuing Entity, including the Cap Contracts
and the Supplemental Interest Trust subtrust, which in turn
holds
the Swap Agreement, and any credit enhancement and passive
derivative financial instruments that pertain to beneficial
interests issued or sold to parties other than the Depositor,
its
Affiliates, or its agents;
(ii) issuing Certificates and other interests in the assets of
the
Trust Fund;
(iii) through the appropriate subtrust, as applicable,
receiving
collections on the Mortgage Loans and the Swap Agreement and
making payments on such Certificates and interests in
accordance
with the terms of this Agreement; and
(iv) engaging in other activities that are necessary or incidental
to
accomplish these limited purposes, which activities cannot be
contrary to the status of the Issuing Entity as a qualified
special purpose entity under existing accounting literature.
Permitted Investments: At any time, any one or more of the
following
obligations and securities:
(i) obligations of the
United States or any agency thereof, provided
the timely payment of such obligations is backed by the full
faith and credit of the United States;
(ii) general obligations of or obligations guaranteed by any state
of
the United States or the District of Columbia receiving the
highest long-term debt rating of each Rating Agency rating the
Certificates;
(iii) commercial or finance company paper, other than commercial
or
finance company paper issued by the Depositor, the Securities
Administrator or any of its Affiliates, which is then receiving
the highest commercial or finance company paper rating of each
such Rating Agency;
(iv) certificates of deposit, demand or time deposits, or
bankers'
acceptances (other
than banker's acceptances issued by the
Securities Administrator or any of its Affiliates) issued by
any
depository institution or trust company incorporated
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under the laws of the United States or of any state thereof and
subject to supervision and examination by federal and/or state
banking authorities, provided that the commercial paper and/or
long term unsecured debt obligations of such depository
institution or trust company are then rated one of the two
highest long-term and the highest short-term ratings of each
such
Rating Agency for such securities;
(v) demand or time
deposits or certificates of deposit issued by any
bank or trust company or savings institution to the extent that
such deposits are fully insured by the FDIC;
(vi) guaranteed reinvestment agreements issued by any bank,
insurance
company or other corporation rated in the two highest long-term
or the highest short-term ratings of each Rating Agency
containing, at the time of the issuance of such agreements,
such
terms and conditions as will not result in the downgrading or
withdrawal of the rating then assigned to the Certificates by
any
such Rating Agency as evidenced by a letter from each Rating
Agency;
(vii) repurchase obligations with respect to any security described
in
clauses (i) and (ii) above, in either case entered into with a
depository institution or trust company (acting as principal)
described in clause (v) above;
(viii) securities (other than stripped bonds, stripped coupons
or
instruments sold at a purchase price in excess of 115% of the
face amount thereof) bearing interest or sold at a discount
issued by any corporation, other than the Securities
Administrator or any of its Affiliates, incorporated under the
laws of the United States or any state thereof which, at the
time
of such investment, have one of the two highest long term
ratings
of each Rating Agency;
(ix) interests in any money market fund (including those offered
by
the Securities Administrator, the Trustee or its Affiliates),
which at the date of acquisition of the interests in such fund
and throughout the time such interests are held in such fund
has
the highest applicable long term rating by each Rating Agency
rating such fund; and
(x) short term
investment funds sponsored by any trust company or
national banking association incorporated under the laws of the
United States or any state thereof, other than the Securities
Administrator or any of its Affiliates, which on the date of
acquisition has been rated by each such Rating Agency in their
respective highest applicable rating category;
provided, that no such instrument shall be a Permitted Investment
if such
instrument (i) evidences the right to receive interest only
payments with
respect to the obligations underlying such instrument, (ii) is
purchased at a
premium or above par or (iii) is purchased at a deep discount;
provided,
further, that no such instrument shall be a Permitted Investment
(A) if such
instrument evidences principal and interest payments derived from
obligations
underlying such instrument and the interest payments with respect
to such
instrument provide a yield to maturity of greater than 120% of the
yield to
maturity at par of such underlying obligations, or (B) if it may be
redeemed at
a price below the purchase price (the foregoing clause (B) not to
apply to
investments in units of money market funds pursuant to clause (ix)
above); and
provided, further, (I) that no amount beneficially owned by any
REMIC
(including, without limitation, any amounts collected by the
Servicers but not
yet deposited in the Collection Accounts) may be invested
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in investments (other than money market funds) treated as equity
interests for
Federal income tax purposes, unless such Servicer shall receive an
Opinion of
Counsel, at the expense of the party requesting that such
investment be made, to
the effect that such investment will not adversely affect the
status of the any
REMIC provided for herein as a REMIC under the Code or result in
imposition of a
tax on the Issuing Entity or any REMIC provided for herein and (II)
each such
investment must be a "permitted investment" within the meaning of
Section
860G(a)(5) of the Code. Permitted Investments that are subject to
prepayment or
call may not be purchased at a price in excess of par.
Permitted Transferee: Any Person other than (i) the United States,
any
State or political subdivision thereof, or any agency or
instrumentality of any
of the foregoing, (ii) a foreign government, International
Organization or any
agency or instrumentality of either of the foregoing, (iii) an
organization
(except certain farmers' cooperatives described in Section 521 of
the Code) that
is exempt from tax imposed by Chapter 1 of the Code (including the
tax imposed
by Section 511 of the Code on unrelated business taxable income) on
any excess
inclusions (as defined in Section 860E(c)(1) of the Code) with
respect to the
Class R Certificate, (iv) rural electric and telephone cooperatives
described in
Section 1381(a)(2)(C) of the Code, and (v) a Person that is not a
citizen or
resident of the United States, a corporation or partnership (or
other entity
treated as a corporation or partnership for United States federal
income tax
purposes) created or organized in or under the laws of the United
States or any
State thereof or the District of Columbia or an estate whose income
from sources
without the United States is includable in gross income for United
States
federal income tax purposes regardless of its connection with the
conduct of a
trade or business within the United States, or a trust if a court
within the
United States is able to exercise primary supervision over the
administration of
the trust and one or more United States persons have authority to
control all
substantial decisions of the trust, unless, in the case of this
clause (v), such
Person has furnished the transferor and the Securities
Administrator with a duly
completed Internal Revenue Service Form W-8ECI or applicable
successor form. The
terms "United States," "State" and "International Organization"
shall have the
meanings set forth in Section 7701 of the Code. A corporation will
not be
treated as an instrumentality of the United States or of any State
thereof for
these purposes if all of its activities are subject to tax and,
with the
exception of the Federal Home Loan Mortgage Corporation, a majority
of its board
of directors is not selected by such government unit.
Person: Any individual, corporation, partnership, limited
liability
company, joint venture, association, joint-stock company, trust,
unincorporated
organization or government, or any agency or political subdivision
thereof.
Pool
Stated Principal Balance: As to any Distribution Date, the
aggregate
of the Stated Principal Balances, as of such Distribution Date, of
the Mortgage
Loans that were Outstanding Mortgage Loans as of such date.
Preference Claim: The meaning set forth in Section 4.04(j)
hereof.
Preliminary Statement: The paragraphs in the preamble to this
Agreement
that precede the heading "The SWAP REMIC."
Prepayment Assumption: A rate of prepayment, as described in the
Prospectus
Supplement in the definition of "Modeling Assumptions," relating to
the Offered
Certificates.
Prepayment Charges: Any prepayment premium or charge payable by a
Mortgagor
in connection with any Principal Prepayment on a Mortgage Loan
pursuant to the
terms of the related Mortgage Note or Mortgage, as applicable.
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Prepayment Interest Excess: With respect to any Servicer Remittance
Date,
for each Mortgage Loan that was the subject of a Principal
Prepayment in full
during the portion of the related Prepayment Period occurring
between the first
day of the calendar month in which such Servicer Remittance Date
occurs and the
last day of the related Prepayment Period, an amount equal to
interest (to the
extent received) at the applicable Net Mortgage Rate on the amount
of such
Principal Prepayment for the number of days commencing on the first
day of the
calendar month in which such Servicer Remittance Date occurs and
ending on the
date on which such Principal Prepayment is so applied.
Prepayment Interest Shortfall: With respect to any Distribution
Date, for
each Mortgage Loan that was the subject of a Principal Prepayment
in full (other
than a Principal Prepayment in full resulting from the purchase of
a Mortgage
Loan pursuant to Section 2.02, 2.03 or 9.01 hereof and other than a
Principal
Prepayment in full on a Mortgage Loan received during the period
from and
including the first day to and including the 14th day of the month
of such
Distribution Date), the amount, if any, by which (i) one month's
interest at the
applicable Net Mortgage Rate on the Stated Principal Balance of
such Mortgage
Loan as of the preceding Distribution Date exceeds (ii) the amount
of interest
paid or collected in connection with such Principal Prepayment.
Prepayment Period: With respect to any Distribution Date, the
period
beginning with the opening of business on the 15th day of the
calendar month
preceding the month in which such Distribution Date occurs (or in
the case of
the first Distribution Date, beginning with the opening of business
on the
Cut-off Date) and ending on the close of business on the 14th day
of the month
in which such Distribution Date occurs.
Principal Distribution Amount: With respect to each Distribution
Date, the
sum of (i) the Principal Funds for such Distribution Date and (ii)
any Extra
Principal Distribution Amount for such Distribution Date.
Principal Funds: With respect to the Mortgage Loans and any
Distribution
Date, the sum, without duplication, of (1) the scheduled principal
due during
the related Due Period and received before the related Servicer
Remittance Date
or advanced on or before the related Servicer Remittance Date, (2)
prepayments
in full collected in the related Prepayment Period, (3) the Stated
Principal
Balance of each Mortgage Loan that was purchased by the Depositor
during the
related Prepayment Period or, in the case of a purchase pursuant to
Section
9.01, on the Business Day prior to such Distribution Date, (4) the
amount, if
any, by which the aggregate unpaid principal balance of any
Replacement Mortgage
Loan is less than the aggregate unpaid principal of the related
Deleted Mortgage
Loans delivered by the Sponsor in connection with a substitution of
a Mortgage
Loan pursuant to Section 2.03(c), (5) all Liquidation Proceeds
collected during
the related Prepayment Period (to the extent such Liquidation
Proceeds relate to
principal and represent payment in full), (6) all Subsequent
Recoveries received
during the related Due Period and (7) all other collections and
recoveries in
respect of principal during the related Due Period, less (A) all
Non-Recoverable
Advances relating to principal with respect to the Mortgage Loans
and (B) other
amounts reimbursable (including without limitation indemnity
payments) to the
Servicers, the Master Servicer, the Securities Administrator and
the Trustee
pursuant to this Agreement and allocable to principal.
Principal Prepayment: Any Mortgagor payment or other recovery of
(or
proceeds with respect to) principal on a Mortgage Loan (including
Mortgage Loans
purchased or repurchased under Sections 2.02, 2.03, 3.12 and 9.01
hereof) that
is received or recovered in advance of its scheduled Due Date and
is not
accompanied by an amount as to interest representing scheduled
interest due on
any date or dates in any month or months subsequent to the month of
prepayment.
Partial Principal Prepayments shall be applied by the related
Servicer in
accordance with the terms of the related Mortgage Note.
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Prospectus Supplement: The Prospectus Supplement dated September
26, 2006,
relating to the public offering of the Offered Certificates.
PUD: A Planned Unit
Development.
Purchase Price: With respect to any Mortgage Loan required to
be
repurchased by the Sponsor or the Transferor pursuant to Section
2.02 or 2.03
hereof, an amount equal to the sum of (i) 100% of the unpaid
principal balance
of the Mortgage Loan as of the date of such purchase together with
any
unreimbursed Servicing Advances, (ii) accrued interest thereon at
the applicable
Mortgage Rate from (a) the date through which interest was last
paid by the
Mortgagor to (b) the Due Date in the month in which the Purchase
Price is to be
distributed to Certificateholders and (iii) any unreimbursed costs,
penalties
and/or damages incurred by the Issuing Entity in connection with
any violation
relating to such Mortgage Loan of any predatory or abusive lending
law. With
respect to any REO Property purchased by a Servicer pursuant to
Section 3.12(c)
hereof, an amount equal to the fair market value of such REO
Property, as
determined in good faith by such Servicer.
QIB:
A "qualified institutional buyer" within the meaning of Rule
144A.
Rating Agency: Either of S&P or Moody's. If any such
organization or its
successor is no longer in existence, "Rating Agency" shall be a
nationally
recognized statistical rating organization, or other comparable
Person,
designated by the Depositor, notice of which designation shall be
given to the
Trustee. References herein to a given rating category of a Rating
Agency shall
mean such rating category without giving effect to any
modifiers.
Rating Agency Condition: As defined in the Swap Agreement.
Realized Loss: With respect to (1) a Liquidated Loan, the amount,
if any,
by which the Stated Principal Balance and accrued interest thereon
at the Net
Mortgage Rate exceeds the amount actually recovered by the related
Servicer with
respect thereto (net of reimbursement of Advances and Servicing
Advances) at the
time such Mortgage Loan became a Liquidated Loan or (2) with
respect to a
Mortgage Loan which is not a Liquidated Loan, any amount of
principal that the
Mortgagor is no longer legally required to pay (except for the
extinguishment of
debt that results from the exercise of remedies due to default by
the
Mortgagor).
Record Date: With respect to the first Distribution Date, the
Closing Date.
With respect to any other Distribution Date, the close of business
on the last
Business Day of the month preceding the month in which the
applicable
Distribution Date occurs.
Reference Banks: Barclays Bank PLC, JPMorgan Chase Bank, N.A.,
Citibank,
N.A., Wells Fargo Bank, N.A. and NatWest, N.A.; provided that if
any of the
foregoing banks are not suitable to serve as a Reference Bank, then
any leading
banks selected by the Securities Administrator which are engaged in
transactions
in Eurodollar deposits in the international Eurocurrency market (i)
with an
established place of business in London, England, (ii) whose
quotations appear
on the Reuters Screen LIBO Page on the relevant Interest
Determination Date and
(iii) which have been designated as such by the Securities
Administrator.
Regular Certificate: Any one of the Class A, Class M and Class
B
Certificates.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB),
17 C.F.R. Sections 229.1100-229.1123, as such may be amended from
time to time,
and subject to such clarification and interpretation as have been
provided by
the Commission in the adopting release (Asset-Backed
Securities,
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Securities Act Release No. 33-8518, 70 Fed Reg. 1,506, 1.531 (Jan.
7, 2005)) or
by the staff of the Commission, or as may be provided by the
Commission or its
staff from time to time.
Regulation S: Regulation S promulgated under the Securities Act or
any
successor provision thereto, in each case as the same may be
amended from time
to time; and all references to any rule, section or subsection of,
or definition
or term contained in, Regulation S means such rule, section,
subsection,
definition or term, as the case may be, or any successor thereto,
in each case
as the same may be amended from time to time.
Regulation S Book-Entry Certificates: Certificates sold in
offshore
transactions in reliance on Regulation S in the form of one or more
permanent
global Certificates in definitive, fully registered form without
interest
coupons, which shall be deposited on behalf of the subscribers for
such
Certificates represented thereby with the Securities Administrator,
as custodian
for DTC and registered in the name of a nominee of DTC.
Related Certificates: For each interest in the Upper Tier REMIC,
the Class
of Certificates listed on the same row in the table entitled "Upper
Tier REMIC"
in the Preliminary Statement.
Relief Act: The Servicemembers Civil Relief Act or any similar
state or
local law.
Relief Act Shortfall: With respect to any Distribution Date and
any
Mortgage Loan, any reduction in the amount of interest or principal
collectible
on such Mortgage Loan for the most recently ended calendar month as
a result of
the application of the Relief Act.
REMIC: A "real estate mortgage investment conduit" within the
meaning of
section 860D of the Code. References herein to "the REMICs" or "a
REMIC" shall
mean any of (or, as the context requires, all of) the SWAP REMIC,
the Lower Tier
REMIC and the Upper Tier REMIC.
REMIC Pass-Through Rate: In the case of a Class of the Class A,
Class M and
Class B Certificates, the Upper Tier REMIC Net WAC Cap for the
Corresponding
REMIC Regular Interest.
REMIC Provisions: Provisions of the federal income tax law relating
to real
estate mortgage investment conduits, which appear at sections 860A
through 860G
of Subchapter M of Chapter 1 of the Code, and related provisions,
and proposed,
temporary and final regulations and published rulings, notices and
announcements
promulgated thereunder, as the foregoing may be in effect from time
to time as
well as provisions of applicable state laws.
REMIC Regular Interests: Each of the interests in the Upper Tier
REMIC as
set forth in the Preliminary Statement other than the Residual
Interest.
REMIC SWAP Rate: For each Distribution Date (and the related
Accrual
Period), a per annum rate equal to the Fixed Rate under the Swap
Agreement for
such Distribution Date, as set forth in the Prospectus
Supplement.
Remittance Report: As defined in Section 4.04(j) hereof.
REO
Property: A Mortgaged Property acquired by either Servicer
through
foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted
Mortgage Loan.
Replacement Mortgage Loan: A Mortgage Loan substituted by the
Depositor for
a Deleted Mortgage Loan, which must, on the date of such
substitution, as
confirmed in a Request for Release,
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substantially in the form of Exhibit I (1) have a Stated Principal
Balance,
after deduction of the principal portion of the Scheduled Payment
due in the
month of substitution, not in excess of, and not less than 90% of
the Stated
Principal Balance of the Deleted Mortgage Loan; (2) with respect to
any Fixed
Rate Mortgage Loan, have a Mortgage Rate not less than or no more
than 1% per
annum higher than the Mortgage Rate of the Deleted Mortgage Loan
and, with
respect to any Adjustable Rate Mortgage Loan: (A) have a Maximum
Mortgage Rate
no more than 1% per annum higher or lower than the Maximum Mortgage
Rate of the
Deleted Mortgage Loan; (B) have a Minimum Mortgage Rate no more
than 1% per
annum higher or lower than the Minimum Mortgage Rate of the Deleted
Mortgage
Loan; (C) have the same index and Periodic Rate Cap as that of the
Deleted
Mortgage Loan and a Gross Margin not more than 1% per annum higher
or lower than
that of the Deleted Mortgage Loan; (D) not permit conversion of the
related
Mortgage Rate to a fixed Mortgage Rate and (F) currently be
accruing interest at
a rate not more than 1% per annum higher or lower than that of the
Deleted
Mortgage Loan; (3) have a similar or higher FICO score or credit
grade than that
of the Deleted Mortgage Loan; (4) have a Loan-to-Value Ratio (or
Combined
Loan-to-Value Ratio, in the case of the Mortgage Loans in a second
lien
position) no higher than that of the Deleted Mortgage Loan; (5)
have a remaining
term to maturity no greater than (and not more than one year less
than) that of
the Deleted Mortgage Loan; (6) provide for a Prepayment Charge on
terms
substantially similar to those of the Prepayment Charge, if any, of
the Deleted
Mortgage Loan; (7) have the same lien priority as the Deleted
Mortgage Loan; (8)
constitute the same occupancy type as the Deleted Mortgage Loan;
and (9) comply
with each representation and warranty set forth in Section 2.03
hereof.
Request for Release: The Request for Release of Documents submitted
by a
Servicer to the Trustee (or the Custodian on its behalf),
substantially in the
form of Exhibit I hereto.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance
policy that is required to be maintained from time to time under
this Agreement.
Required Percentage: As of any Distribution Date following the
Stepdown
Date, the quotient of (1) the excess of (A) the aggregate Stated
Principal
Balance of the Mortgage Loans as of such Distribution Date, over
(B) the
Certificate Principal Balance of the most senior Class of
Certificates
outstanding as of such Distribution Date, prior to giving effect
to
distributions to be made on such Distribution Date and (2) the
aggregate Stated
Principal Balance of the Mortgage Loans as of such Distribution
Date.
Requirements: Any rules or regulations promulgated pursuant to
the
Sarbanes-Oxley Act of 2002 (as such may be amended from time to
time).
Reserve Interest Rate: With respect to any Interest Determination
Date, the
rate per annum that the Securities Administrator determines to be
(1) the
arithmetic mean (rounded upwards if necessary to the nearest whole
multiple of
0.03125%) of the one-month United States dollar lending rates which
New York
City banks selected by the Securities Administrator are quoting on
the relevant
Interest Determination Date to the principal London offices of
leading banks in
the London interbank market or (2) in the event that the
Securities
Administrator can determine no such arithmetic mean, the lowest
one-month United
States dollar lending rate which New York City banks selected by
the Securities
Administrator are quoting on such Interest Determination Date to
leading
European banks.
Residual Interest: An interest in the Upper Tier REMIC that is
entitled to
all distributions of principal and interest on the Class R
Certificate other
than distributions in respect of the Class SWR Interest and Class
LTR Interest
and distributions on the Class R Certificate in respect of Excess
Interest.
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Responsible Officer: When
used with respect to the Securities
Administrator, the Master Servicer, the Trustee or the Servicers,
any officer of
the Securities Administrator, the Master Servicer, Trustee or the
Servicers,
with direct responsibility for the administration of this Agreement
and any
other officer to whom, with respect to a particular matter, such
matter is
referred because of such officer's knowledge of and familiarity
with the
particular subject.
Reuters Screen LIBO Page: The display designated as page "LIBO" on
the
Reuters Monitor Money Rates Service (or such other page as may
replace such LIBO
page on that service) for the purpose of displaying London
interbank offered
rates of major banks.
S&P: Standard & Poor's, a division of The McGraw-Hill
Companies, Inc., or
any successor in interest.
Sale
Agreement: The Mortgage Loan Sale and Assignment Agreement dated as
of
September 1, 2006, between the Depositor and the Sponsor.
Sarbanes-Oxley Certification: Has the meaning set forth in Section
3.20.
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan
due on
any Due Date allocable to principal and/or interest on such
Mortgage Loan.
Securities Act: The Securities Act of 1933, as amended.
Securities Administrator: LaSalle Bank National Association, a
national
banking association, or any successor in interest.
Securities Administrator Fee: The Securities Administrator is
entitled to
the investment income earned on amounts on deposit in the
Certificate Account as
set forth in Section 3.05(f) hereof.
Servicers: Wilshire Credit Corporation, a Nevada corporation, or
its
successor in interest and IndyMac Bank, F.S.B., a national savings
bank, or its
successor in interest.
Servicer Advance Date: As to any Distribution Date, the related
Servicer
Remittance Date.
Servicer Remittance Date: With respect to Wilshire, with respect to
any
Distribution Date, the later of two Business Days after the 15th
day of the
month in which such Distribution Date occurs and the 18th day (or
if such day is
not a Business Day, the next preceding Business Day) of the month
in which such
Distribution Date occurs, and with respect to IndyMac, with respect
to any
Distribution Date, the 18th day (or if such day is not a Business
Day, the next
preceding Business Day) of the month in which such Distribution
Date occurs.
Servicing Advances: All customary, reasonable and necessary "out of
pocket"
costs and expenses incurred in the performance by each Servicer of
its servicing
obligations hereunder (including the Master Servicer to the extent
it is
required to make such Advance hereunder), including, but not
limited to, the
cost of (1) the preservation, inspection, restoration and
protection of a
Mortgaged Property, including without limitation advances in
respect of prior
liens, real estate taxes and assessments, (2) any collection,
enforcement or
judicial proceedings, including without limitation foreclosures,
collections and
liquidations, (3) the conservation, management, sale and
liquidation of any REO
Property, (4) executing and recording instruments of satisfaction,
deeds of
reconveyance, substitutions of trustees on deeds of trust or
Assignments of
Mortgage to the extent not otherwise recovered from the related
Mortgagors or
payable under this Agreement, (5) correcting errors of prior
servicers; costs
and expenses charged to the related Servicer by the Trustee, Master
Servicer or
Securities Administrator; tax tracking;
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title research; flood certifications; and lender paid mortgage
insurance, (6)
obtaining or correcting any legal documentation required to be
included in the
Mortgage Files and reasonably necessary for each Servicer to
perform their
obligations under this Agreement and (7) compliance with the
obligations under
Sections 3.01 and 3.10.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of
Regulation AB, as such may be amended from time to time.
Servicing Fee: As to each Mortgage Loan and any Distribution Date,
an
amount equal to the product of (x) the Servicing Fee Rate and (y)
the Stated
Principal Balance of such Mortgage Loan as of the preceding
Distribution Date
or, in the event of any payment of interest that accompanies a
Principal
Prepayment in full made by the Mortgagor, interest at the Servicing
Fee Rate on
the Stated Principal Balance of such Mortgage Loan as of the
preceding
Distribution Date for the period covered by such payment of
interest.
Servicing Fee Rate: means 0.50% for each Mortgage Loan serviced by
Wilshire
and 0.375% for each Mortgage Loan serviced by IndyMac Bank..
Servicing Officer: Any officer of a Servicer, as applicable
involved in, or
responsible for, the administration and servicing of the Mortgage
Loans whose
name and facsimile signature appear on a list of servicing officers
furnished to
the Master Servicer, the Securities Administrator and the Trustee
by such
Servicer on the Closing Date pursuant to this Agreement, as such
lists may from
time to time be amended.
Servicing Rights Pledgee: One or more lenders, selected by either
Servicer,
to which the related Servicer may pledge and assign all of its
right, title and
interest in, to and under this Agreement.
Servicing Transfer Costs: In the event that either Servicer does
not
reimburse the Master Servicer under this Agreement, all costs
associated with
the transfer of servicing from such predecessor Servicer,
including, without
limitation, any costs or expenses associated with the termination
of such
predecessor Servicer, the appointment of a successor servicer, the
complete
transfer of all servicing data and the completion, correction or
manipulation of
such servicing data as may be required by the Master Servicer or
any successor
servicer to correct any errors or insufficiencies in the servicing
data or
otherwise to enable the Master Servicer or successor servicer to
service the
Mortgage Loans properly and effectively.
SFAS
140: Statement of Financial Accounting Standard No. 140,
Accounting
for Transfers and Servicing of Financial Assets and Extinguishments
of
Liabilities dated September 2000, published by the Financial
Accounting
Standards Board of the Financial Accounting Foundation.
Significance Estimate: With respect to any Distribution Date, and
in
accordance with Item 1115 of Regulation AB, shall be an amount
determined based
on the reasonable good-faith estimate by the Depositor or its
Affiliate (and
reported to the Securities Administrator) of the aggregate maximum
probable
exposure of the outstanding Certificates to the Swap Agreement.
Significance Percentage: With respect to any Distribution Date, and
in
accordance with Item 1115 of Regulation AB, shall be a percentage
equal to the
Significance Estimate divided by the aggregate outstanding
Certificate Principal
Balance of the Certificates, prior to the distribution of the
Principal
Distribution Amount on such Distribution Date.
Sponsor: Merrill Lynch Mortgage Lending, Inc., a Delaware
corporation, or
its successor in interest.
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Startup Day: As defined in Section 2.07 hereof.
Stated Principal Balance: With respect to any Mortgage Loan or
related REO
Property (1) as of the Cut-off Date, the Cut-off Date Principal
Balance thereof,
and (2) as of any Distribution Date, such Cut-off Date Principal
Balance, minus
the sum of (A) the principal portion of the Scheduled Payments (x)
due with
respect to such Mortgage Loan during each Due Period ending prior
to such
Distribution Date and (y) that were received by the related
Servicer as of the
close of business on the Determination Date related to such
Distribution Date or
with respect to which Advances were made on the Servicer Advance
Date prior to
such Distribution Date and (B) all Principal Prepayments with
respect to such
Mortgage Loan received on or prior to the last day of the related
Prepayment
Period, and all Liquidation Proceeds to the extent applied by the
related
Servicer as recoveries of principal in accordance with Section 3.12
with respect
to such Mortgage Loan, that were received by such Servicer as of
the close of
business on the last day of the related Due Period. Notwithstanding
the
foregoing, the Stated Principal Balance of a Liquidated Loan shall
be deemed to
be zero.
Stepdown Date: The earlier of: (A) the first Distribution Date on
which the
aggregate Certificate Principal Balance of the Class A Certificates
has been
reduced to zero; and (B) the later to occur of (1) the Distribution
Date in
October 2009 or (2) the first Distribution Date on which (A) the
Class A
Certificate Principal Balance (reduced by the Principal Funds with
respect to
such Distribution Date) is less than or equal to (B) 55.80% of the
aggregate
Stated Principal Balances of the Mortgage Loans as of such
Distribution Date.
Stepdown Required Loss Percentage: For any Distribution Date,
the
applicable percentage for such Distribution Date set forth in the
following
table:
<TABLE>
<CAPTION>
DISTRIBUTION DATE OCCURRING IN STEPDOWN
REQUIRED LOSS PERCENTAGE
------------------------------
--------------------------------------
<S>
<C>
October 2008 -- September 2009 1.55% with respect to
October 2008,
plus an additional 1/12th of 1.80% for
each month thereafter
October 2009 -- September 2010 3.30% with respect to
October 2009,
plus an additional 1/12th of 1.90% for
each month thereafter
October 2010 -- September 2011 5.20% with respect to
October 2010,
plus an additional 1/12th of 1.55% for
each month thereafter
October 2011 -- September 2012 6.75% with respect to
October 2011,
plus an additional 1/12th of 0.80% for
each month thereafter
October 2012 and thereafter 7.55%
</TABLE>
Stepdown Trigger Event: With respect to the Certificates on or
after the
Stepdown Date, a Distribution Date on which (1) the quotient of (A)
the
aggregate Stated Principal Balance of all Mortgage Loans that are
60 or more
days Delinquent measured on a rolling three month basis (including,
for the
purposes of this calculation, Mortgage Loans in foreclosure and REO
Properties
and Mortgage Loans with respect to which the applicable Mortgagor
is in
bankruptcy) and (B) the Stated Principal Balance of the Mortgage
Loans as of the
preceding Servicer Remittance Date, equals or exceeds the product
of (i) 36.15%
and (ii) the Required Percentage or (2) the quotient (expressed as
a percentage)
of (A) the aggregate Realized Losses incurred from the Cut-off Date
through the
last day of the calendar month
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preceding such Distribution Date and (B) the aggregate principal
balance of the
Mortgage Loans as of the Cut-off Date exceeds the Stepdown Required
Loss
Percentage.
Subcontractor: Any outsourcer that performs one or more discrete
functions
identified in Item 1122(d) of Regulation AB with respect to 5% or
more of the
Mortgage Loans under the direction or authority of a Servicer
(measured by
aggregate Stated Principal Balance of the Mortgage Loans, annually
at the
commencement of the calendar year prior to the year in which an
Assessment of
Compliance is required to be delivered, multiplied by a fraction,
the numerator
of which is the number of months during which such Subcontractor
performs such
discrete functions and the denominator of which is 12, or, in the
case of the
year in which the Closing Date occurs, the number of months elapsed
in such
calendar year).
Subordinate Certificates: Each of the Class M and Class B
Certificates.
Subordinate Certificates Cap Contract: The master agreement, credit
support
annex and confirmation between the Securities Administrator on
behalf of the
Supplemental Interest Trust and the Cap Contract Counterparty (in
the form of
Exhibit M-3 hereto).
Subordinate Certificates Cap Contract Notional Balance: With
respect to any
Distribution Date, the Subordinate Certificates Cap Contract
Notional Balance
set forth for such Distribution Date in the Subordinate
Certificates One-Month
LIBOR Cap Table attached hereto as Exhibit N-3.
Subsequent Recovery: Any amount received on a Mortgage Loan (net of
amounts
reimbursed to the related Servicer related to Liquidated Loans)
subsequent to
such Mortgage Loan being determined to be a Liquidated Loan.
Sub-Servicer: Any Person that services Mortgage Loans on behalf of
either
Servicer pursuant to a Subservicing Agreement and is responsible
for the
performance of the material servicing functions required to be
performed by the
related Servicer under this Agreement that are identified in Item
1122(d) of
Regulation AB with respect to 10% or more of the Mortgage Loans
under the
direction or authority of such Servicer (measured by aggregate
Stated Principal
Balance of the Mortgage Loans, annually at the commencement of the
calendar year
prior to the year in which an Assessment of Compliance is required
to be
delivered, multiplied by a fraction, the numerator of which is the
number of
months during which such Subservicer services the related Mortgage
Loans and the
denominator of which is 12, or, in the case of the year in which
the Closing
Date occurs, the number of months elapsed in such calendar year).
Any
subservicer shall meet the qualifications set forth in Section
3.02.
Subservicing Agreement: As defined in Section 3.02(a).
Substitution Adjustment Amount: The meaning ascribed to such term
pursuant
to Section 2.03(c).
Supplemental Interest Trust: The separate trust, established
pursuant to
Section 4.04(l) of this Agreement and held by the Securities
Administrator on
behalf of the Trustee for the benefit of the holders of the
Certificates as a
segregated subtrust of the Trust Fund, in which the Swap Agreement
will be held,
out of which any Swap Termination Payments or Net Swap Payments
owed to the Swap
Counterparty will be paid, certain distributions to
Certificateholders will be
made, and into which any Swap Termination Payments or Net Swap
Payments received
from the Swap Counterparty will be deposited as set forth in
Section 4.04
hereof.
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Swap
Agreement: The swap agreement, dated as of September 28, 2006,
between
the Swap Counterparty and the Supplemental Interest Trust evidenced
by the
master agreement, credit support annex and confirmation.
Swap
Counterparty: The Royal Bank of Scotland plc or any successor
counterparty who meets the requirements set forth in the Swap
Agreement.
Swap
LIBOR: With respect to any Distribution Date (and the related
Accrual
Period) the product of (i) the Floating Rate Option (as defined in
the Swap
Agreement for the related Swap Payment Date), (ii) two and (iii)
the quotient of
(a) the actual number of days in the Accrual Period for the Lower
Tier REMIC
Interests divided by (b) 30.
Swap
Payment Date: For so long as the Swap Agreement is in effect or
amounts remain unpaid thereunder, the second Business Day (as
defined in the
Swap Agreement) immediately preceding each Distribution Date.
SWAP
REMIC: As described in the Preliminary Statement and Section
2.07.
SWAP
REMIC Interests: Each of the interests in the SWAP REMIC as set
forth
in the Preliminary Statement.
SWAP
REMIC Regular Interests: Each of the SWAP REMIC Interests other
than
the Class SWR Interest.
Swap Termination
Payment: Any payment payable by the Supplemental Interest
Trust or the Swap Counterparty upon termination of the Swap
Agreement.
Tax
Matters Person: The Person designated as "tax matters person" in
the
manner provided under Treasury regulation Section 1.860F-4(d) and
Treasury
regulation Section 301.6231(a)(7)-1.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest
in a Certificate.
Transfer Agreement: Each document set out on Exhibit J hereto
pursuant to
which the Sponsor acquired any Mortgage Loan from the Transferor of
such
Mortgage Loan.
Transferor: Each originator of a Mortgage Loan.
Trust Fund: The corpus of the Issuing Entity (the "Merrill Lynch
Mortgage
Investors Trust, Series 2006-HE5") created hereunder consisting of
(i) the
Mortgage Loans and all interest and principal received on or with
respect
thereto on and after the Cut-off Date to the extent not applied in
computing the
Cut-off Date Principal Balance thereof, exclusive of interest not
required to be
deposited in the Collection Accounts; (ii) the Collection Accounts,
the Master
Servicer Collection Account and the Certificate Account and all
amounts
deposited therein pursuant to the applicable provisions of this
Agreement; (iii)
property that secured a Mortgage Loan and has been acquired by
foreclosure, deed
in lieu of foreclosure or otherwise; (iv) the mortgagee's rights
under the
Insurance Policies with respect to the Mortgage Loans; (v) all
proceeds of the
conversion, voluntary or involuntary, of any of the foregoing into
cash or other
liquid property; (vi) the Cap Contracts and Cap Contract Account
and (vii) the
Supplemental Interest Trust, which in turn holds the Swap
Agreement.
Trustee: Citibank, N.A., a national banking association, not in
its
individual capacity, but solely in its capacity as trustee for the
benefit of
the Certificateholders under this Agreement, and any successor
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<PAGE>
thereto, and any corporation or national banking association
resulting from or
surviving any consolidation or merger to which it or its successors
may be a
party and any successor trustee as may from time to time be serving
as successor
trustee hereunder.
Uncertificated Class C Interest: An uncertificated REMIC Regular
Interest
having the characteristics described in the Preliminary
Statement.
United States Person: (i) A citizen or resident of the United
States, (ii)
a corporation, partnership or other entity treated as a corporation
or
partnership for federal income tax purposes organized in or under
the laws of
the United States or any state thereof or the District of Columbia
(unless, in
the case of a partnership, Treasury regulations provide otherwise),
(iii) an
estate the income of which is includible in gross income for United
States tax
purposes regardless of its source or (iv) a trust if a court within
the United
States is able to exercise primary supervision over the
administration of the
trust and one or more United States persons have authority to
control all
substantial decisions of the trust. Notwithstanding the preceding
sentence, to
the extent provided in Treasury regulations, certain trusts in
existence on
August 20, 1996, and treated as United States persons prior to such
date, that
elect to continue to be treated as United States persons will also
be United
States Persons.
Unpaid Realized Loss Amount: The Class M-1 Unpaid Realized Loss
Amount,
Class M-2 Unpaid Realized Loss Amount, Class M-3 Unpaid Realized
Loss Amount,
Class M-4 Unpaid Realized Loss Amount, Class M-5 Unpaid Realized
Loss Amount,
Class M-6 Unpaid Realized Loss Amount, Class B-1 Unpaid Realized
Loss Amount,
Class B-2 Unpaid Realized Loss Amount, Class B-3 Unpaid Realized
Loss Amount and
Class C Unpaid Realized Loss Amount, collectively.
Upper Tier REMIC: As described in the Preliminary Statement and
Section
2.07.
Upper Tier REMIC Net WAC Cap: In the case of the Class UTA-1
Interest and
the Residual Interest, a per annum rate equal to the weighted
average of the
interest rate of the Class LTII1B Interest for such Distribution
Date. In the
case of the Class UTA-2A, Class UTA-2B, Class UTA-2C and Class
UTA-2D Interests,
a per annum rate equal to the weighted average of the interest rate
for the
Class LTII2B for such Distribution Date. In the case of the Class
UTM-1, Class
UTM-2, Class UTM-3, Class UTM-4, Class UTM-5, Class UTM-6, Class
UTB-1, Class
UTB-2 and Class UTB-3 Interests, a per annum rate equal to the
weighted average
of the interest rates of Class LTII1B and Class LTII2B Interests
for such
Distribution weighted, respectively, on the basis of the
uncertificated
principal balances of the Class LTII1A and the Class LTII2A
Interests.
USAP
Report: A report in compliance with the Uniform Single
Attestation
Program for Mortgage Bankers delivered in accordance with Section
3.18.
Voting Rights: The portion of the voting rights of all the
Certificates
that is allocated to any of the Certificates for purposes of the
voting
provisions hereunder. Voting Rights allocated to each Class of
Certificates
shall be allocated as follows: (1) 98% to the Class A, Class M and
Class B
Certificates, with the allocation among such Certificates to be in
proportion to
the Certificate Principal Balance of each Class relative to the
Certificate
Principal Balance of all other Classes and (2) each Class of the
Class C and
Class P will be allocated 1% of the Voting Rights. Voting Rights
will be
allocated among the Certificates of each such Class in accordance
with their
respective Percentage Interests.
Weighted Average Available Funds Cap: With respect to a
Distribution Date,
the per annum rate equal to the weighted average of the Class A-1
Available
Funds Cap and the Class A-2 Available Funds Cap (weighted in
proportion to the
results of subtracting from the aggregate Stated Principal Balance
of each
Mortgage Group, the current Certificate Principal Balance of the
Class A-1 and
Class R Certificates,
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<PAGE>
in the case of Group One, or the Class A-2A, Class A-2B, Class A-2C
and Class
A-2D Certificates, in the case of Group Two).
Weighted Average Maximum Rate Cap: With respect to a Distribution
Date, the
per annum rate equal to the weighted average (weighted in
proportion to the
results of subtracting from the aggregate Stated Principal Balance
of each
Mortgage Group, the current Certificate Principal Balance of the
Class A-1 and
Class R Certificates, in the case of Group One, or the Class A-2A,
Class A-2B,
Class A-2C and Class A-2D Certificates, in the case of Group Two)
of the Class
A-1 Maximum Rate Cap and the Class A-2 Maximum Rate Cap.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Conveyance of Mortgage Loans
The
Depositor, concurrently with the execution and delivery hereof,
does
hereby sell, transfer, assign, set over and convey to the Trustee
without
recourse all the right, title and interest of the Depositor in and
to the assets
of the Trust Fund. Such assignment includes all interest and
principal received
on or with respect to the Mortgage Loans on or after the Cut-off
Date (other
than Scheduled Payments due on the Mortgage Loans on or before the
Cut-off
Date).
It
is agreed and understood by the Depositor, the Master Servicer,
the
Servicers, the Securities Administrator and the Trustee that it is
not intended
that any Mortgage Loan be included in the Trust that is, without
limitation,
either (i) a "High-Cost Home Loan" as defined in the New Jersey
Home Ownership
Act effective November 27, 2003; (ii) a "High-Cost Home Loan" as
defined in the
New Mexico Home Loan Protection Act effective January 1, 2004;
(iii) a
"High-Cost Home Mortgage Loan" as defined in the Massachusetts
Predatory Home
Loan Practices Act effective November 7, 2004; (iv) a "High-Cost
Home Loan" as
defined by the Indiana High Cost Home Loan Law effective January 1,
2005 or (v)
a "High-Cost Home Loan" as defined by the Illinois High Risk Home
Loan Act
effective January 1, 2004.
In
connection with such assignment, the Depositor does hereby deliver
to,
and deposit with the Trustee or the Custodian on its behalf the
following
documents or instruments with respect to each Mortgage Loan:
(A) The original Mortgage Note endorsed in blank or, "Pay to the
order
of
Citibank, N.A., as trustee, without recourse" together with all
riders
thereto. The Mortgage Note shall include all intervening
endorsements
showing a complete chain of the title from the Transferor to
[____________________].
(B) Except as provided below and for each Mortgage Loan that is not
a
MERS
Loan, the original recorded Mortgage together with all riders
thereto,
with
evidence of recording thereon, or, if the original Mortgage has
not
yet
been returned from the recording office, a copy of the original
Mortgage together with all riders thereto certified to be a true
copy of
the
original of the Mortgage that has been delivered for recording in
the
appropriate recording office of the jurisdiction in which the
Mortgaged
Property is located and in the case of each MERS Loan, the
original
Mortgage together with all riders thereto, noting the presence of
the MIN
of
the Loan and either language indicating that the Mortgage Loan is a
MOM
Loan
or if the Mortgage Loan was not a MOM Loan at origination, the
original Mortgage and the assignment thereof to MERS, with
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evidence of recording indicated thereon, or a copy of the
Mortgage
certified by the public recording office in which such Mortgage has
been
recorded.
(C) In the case of each Mortgage Loan that is not a MERS Loan,
the
original Assignment of each Mortgage in blank or, to "Citibank,
N.A., as
trustee."
(D) The original policy of title insurance (or a preliminary
title
report, commitment or binder if the original title insurance policy
has not
been
received from the title insurance company).
(E) Originals of any intervening assignments of the Mortgage,
with
evidence of recording thereon or, if the original intervening
assignment
has
not yet been returned from the recording office, a copy of such
assignment certified to be a true copy of the original of the
assignment
which has been sent for recording in the appropriate jurisdiction
in which
the
Mortgaged Property is located.
(F) Originals of all assumption and modification agreements, if
any.
(G) If in connection with any Mortgage Loan, the Depositor
cannot
deliver the Mortgage, Assignments of Mortgage or assumption,
consolidation
or
modification, as the case may be, with evidence of recording
thereon, if
applicable, concurrently with the execution and delivery of this
Agreement
solely because of a delay caused by the public recording office
where such
Mortgage, Assignments of Mortgage or assumption, consolidation
or
modification, as the case may be, has been delivered for
recordation, the
Depositor shall deliver or cause to be delivered to the Trustee or
the
Custodian on its behalf written notice stating that such Mortgage
or
assumption, consolidation or modification, as the case may be, has
been
delivered to the appropriate public recording office for
recordation.
Thereafter, the Depositor shall deliver or cause to be delivered to
the
Trustee or the Custodian on its behalf such Mortgage, Assignments
of
Mortgage or assumption, consolidation or modification, as the case
may be,
with
evidence of recording indicated thereon, if applicable, upon
receipt
thereof from the public recording office. To the extent any
required
endorsement is not contained on a Mortgage Note or an Assignment
of
Mortgage, the Depositor shall make or cause to be made such
endorsement.
(H) With respect to any Mortgage Loan, none of the Depositor,
the
Master Servicer, the Servicers, the Securities Administrator or the
Trustee
shall be obligated to cause to be recorded the Assignment of
Mortgage
referred to in this Section 2.01. In the event an Assignment of
Mortgage is
not
recorded, the Servicers, the Master Servicer, the Securities
Administrator and the Trustee shall have no liability for their
failure to
receive and act on notices related to such Assignment of
Mortgage.
The
ownership of each Mortgage Note, the Mortgage and the contents of
the
related Mortgage File is vested in the Trustee on behalf of the
Certificateholders. None of the Depositor, the Master Servicer, the
Servicers or
the Securities Administrator shall take any action inconsistent
with such
ownership and shall not claim any ownership interest therein. The
Depositor, the
Master Servicer, the Servicers or the Securities Administrator
shall respond to
any third party inquiries with respect to ownership of the Mortgage
Loans by
stating that such ownership is held by the Trustee on behalf of
the
Certificateholders. Mortgage documents relating to the Mortgage
Loans not
delivered to the Trustee or the Custodian on its behalf are and
shall be held in
trust by the related Servicer, for the benefit of the Trustee as
the owner
thereof, and such Servicer's possession of the contents of each
Mortgage File so
retained is for the sole purpose of servicing the related Mortgage
Loan, and
such retention and possession by such Servicer, is in a custodial
capacity only.
The Depositor agrees to take no action inconsistent with
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the Trustee's ownership of the Mortgage Loans, to promptly indicate
to all
inquiring parties that the Mortgage Loans have been sold and to
claim no
ownership interest in the Mortgage Loans.
It
is the intention of this Agreement that the conveyance of the
Depositor's right, title and interest in and to the Trust Fund
pursuant to this
Agreement shall constitute a purchase and sale and not a loan. If a
conveyance
of Mortgage Loans from the Sponsor to the Depositor is
characterized as a pledge
and not a sale, then the Depositor shall be deemed to have
transferred to the
Trustee all of the Depositor's right, title and interest in, to and
under the
obligations of the Sponsor deemed to be secured by said pledge; and
it is the
intention of this Agreement that the Depositor shall also be deemed
to have
granted to the Trustee a first priority security interest in all of
the
Depositor's right, title, and interest in, to and under the
obligations of the
Sponsor to the Depositor deemed to be secured by said pledge and
that the
Trustee shall be deemed to be an independent custodian for purposes
of
perfection of the security interest granted to the Depositor. If
the conveyance
of the Mortgage Loans from the Depositor to the Trustee is
characterized as a
pledge, it is the intention of this Agreement that this Agreement
shall
constitute a security agreement under applicable law, and that the
Depositor
shall be deemed to have granted to the Trustee a first priority
security
interest in all of the Depositor's right, title and interest in, to
and under
the Mortgage Loans, all payments of principal of or interest on
such Mortgage
Loans, all other rights relating to and payments made in respect of
the Trust
Fund, and all proceeds of any thereof. If the trust created by this
Agreement
terminates prior to the satisfaction of the claims of any Person in
any
Certificates, the security interest created hereby shall continue
in full force
and effect and the Trustee shall be deemed to be the collateral
agent for the
benefit of such Person.
In
addition to the conveyance made in the first paragraph of this
Section
2.01, the Depositor does hereby convey, assign and set over to the
Trustee for
the benefit of the Certificateholders its rights and interests
under the Sale
Agreement, including the Depositor's right, title and interest in
the
representations and warranties contained in the Sale Agreement, the
rights in
the Transfer Agreements described therein, and the benefit of the
repurchase
obligations and the obligation of the Sponsor contained in the Sale
Agreement to
take, at the request of the Depositor or the Trustee, all action on
its part
which is reasonably necessary to ensure the enforceability of a
Mortgage Loan.
The Trustee hereby accepts such assignment, and shall be entitled
to exercise
all rights of the Depositor under the Sale Agreement as if, for
such purpose, it
were the Depositor. The foregoing sale, transfer, assignment,
set-over, deposit
and conveyance does not and is not intended to result in creation
or assumption
by the Trustee of any obligation of the Depositor, the Sponsor, or
any other
Person in connection with the Mortgage Loans or any other agreement
or
instrument relating thereto.
SECTION 2.02. Acceptance by the Trustee of the Mortgage Loans
Except as set forth in the exception report delivered
contemporaneously
herewith (the "Exception Report"), the Trustee acknowledges receipt
of the
Mortgage Note for each Mortgage Loan and delivery of a Mortgage
File (but does
not acknowledge receipt of all documents required to be included in
such
Mortgage File) with respect to each Mortgage Loan and declares that
it holds and
will hold such documents and any other documents constituting a
part of the
Mortgage Files delivered to it or the Custodian on its behalf in
trust for the
use and benefit of all present and future Certificateholders. The
Depositor will
cause the Sponsor to repurchase any Mortgage Loan to which a
material exception
was taken in the Exception Report unless such exception is cured
within 45
Business Days of the Closing Date.
The
Securities Administrator acknowledges receipt of the three Cap
Contracts (forms of which are attached hereto as Exhibits M-1, M-2
and M-3) and
is hereby authorized and instructed to enter into such contracts
not in its
individual capacity but solely as Securities administrator on
behalf of the
trustee
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for the Supplemental Interest Trust, and is further directed to
execute and
deliver the Transfer Agreements and the Sale Agreement.
The
Securities Administrator acknowledges receipt of the Swap
Agreement
that will be held in the Supplemental Interest Trust and is hereby
instructed to
enter into the Swap Agreement, not in its individual capacity, but
solely as
trustee for the Supplemental Interest Trust.
The
Trustee or the Custodian on its behalf agrees, for the benefit
of
Certificateholders, and the NIMs Insurer, to review each Mortgage
File delivered
to it within 60 days after the Closing Date, to ascertain and to
certify, within
70 days of the Closing Date, to the NIMs Insurer, the Depositor the
Master
Servicer and the Servicers that all documents required by Section
2.01 (A)-(B),
(C) (if applicable), and (D)-(E), and the documents if actually
received by it,
under Section 2.01(F), have been executed and received, and that
such documents
relate to the Mortgage Loans identified in Exhibit B-1 that have
been conveyed
to it. It is herein acknowledged that, in conducting such review,
the Trustee or
Custodian shall not be under any duty or obligation to inspect,
review or
examine any such documents, instruments, certificates or other
papers to
determine that they are genuine, enforceable or appropriate for the
represented
purpose, that they have actually been recorded or that they are
other than what
they purport to be on their face. If the Trustee or the Custodian
on its behalf
finds any document or documents constituting a part of a Mortgage
File to be
missing or defective (that is, mutilated, damaged, defaced or
unexecuted) in any
material respect, the Trustee or the Custodian on its behalf shall
promptly (and
in any event within no more than five Business Days) after such
finding so
notify the NIMs Insurer, the Servicers, the Master Servicer the
Sponsor and the
Depositor. In addition, the Trustee or the Custodian on its behalf
shall also
notify the NIMs Insurer, the Servicers, the Master Servicer, the
Sponsor and the
Depositor if the original Mortgage with evidence of recording
thereon with
respect to a Mortgage Loan is not received within 70 days of the
Closing Date;
if it has not been received because of a delay caused by the public
recording
office where such Mortgage has been delivered for recordation, the
Depositor
shall deliver or cause to be delivered to the Trustee or the
Custodian on its
behalf written notice stating that such Mortgage has been delivered
to the
appropriate public recording office for recordation and thereafter
the Depositor
shall deliver or cause to be delivered such Mortgage with evidence
of recording
thereon upon receipt thereof from the public recording office. The
Trustee or
the Custodian on its behalf shall request that the Sponsor correct
or cure such
omission, defect or other irregularity, or substitute a Mortgage
Loan pursuant
to the provisions of Section 2.03(c), within 90 days from the date
the Sponsor
was notified of such omission or defect and, if the Sponsor does
not correct or
cure such omission or defect within such period, that the Sponsor
purchase such
Mortgage Loan from the Issuing Entity within 90 days from the date
the Trustee
or the Custodian on its behalf notified the Sponsor of such
omission, defect or
other irregularity at the Purchase Price of such Mortgage Loan. The
Purchase
Price for any Mortgage Loan purchased pursuant to this Section 2.02
shall be
paid to the related Servicer and deposited by the related Servicer
in the Master
Servicer Collection Account or related Collection Account, as
appropriate,
promptly upon receipt, and upon receipt by the Trustee of written
notification
of such deposit signed by a Servicing Officer or receipt of such
deposit by the
Trustee or the Custodian on its behalf, upon receipt of a Request
for Release
and certification of the related Servicer of such required deposit,
shall
promptly release to the Sponsor the related Mortgage File and the
Trustee shall
execute and deliver such instruments of transfer or assignment,
without
recourse, as shall be requested by the Sponsor and necessary to
vest in the
Sponsor or its designee, as the case may be, any Mortgage Loan
released pursuant
hereto, and the Trustee shall have no further responsibility with
regard to such
Mortgage Loan. It is understood and agreed that the obligation of
the Sponsor to
purchase, cure or substitute any Mortgage Loan as to which a
material defect in
or omission of a constituent document exists shall constitute the
sole remedy
respecting such defect or omission available to the Trustee on
behalf of
Certificateholders and the NIMs Insurer. The preceding sentence
shall not,
however, limit any remedies available to the Certificateholders,
the NIMs
Insurer, the Depositor or the Trustee pursuant to the Sale
Agreement, the
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Transfer Agreements and or the Bring Down Letters. Neither the
Trustee nor the
Custodian on its behalf shall be under any duty or obligation to
inspect, review
and examine such documents, instruments, certificates or other
papers to
determine that they are genuine, enforceable, recordable, duly
authorized,
sufficient, legal, valid or appropriate to the represented purpose,
or that they
have actually been recorded, or that they are other than what they
purport to be
on their face. The Servicers, the Master Servicer, the Securities
Administrator
and the Trustee shall keep confidential the name of each Mortgagor
except as
required for performance of this Agreement and the Servicers, the
Master
Servicer, the Securities Administrator and the Trustee shall not
solicit any
such Mortgagor for the purpose of refinancing the related Mortgage
Loan;
notwithstanding anything herein to the contrary, the foregoing
shall not be
construed to prohibit (i) disclosure of any and all information
that is or
becomes publicly known, or information obtained by the Trustee, the
Servicers,
the Master Servicer or the Securities Administrator from sources
other than the
other parties hereto, (ii) disclosure of any and all information
(A) if required
to do so by any applicable law, rule or regulation, (B) to any
government agency
or regulatory body having or claiming authority to regulate or
oversee any
aspects of the business of the Trustee, the Servicers or that of
any Affiliate,
(C) pursuant to any subpoena, civil investigation demand or similar
demand or
request of any court, regulatory authority, arbitrator or
arbitration to which
the Trustee, the Servicers or any Affiliate or an officer,
director, employer or
shareholder thereof is a party or (D) to any Affiliate, independent
or internal
auditor, agent, employee or attorney of the Trustee, the Servicers,
the Master
Servicer or the Securities Administrator having a need to know the
same,
provided that the Trustee, the Servicers, the Master Servicer or
the Securities
Administrator, as applicable, advises such recipient of the
confidential nature
of the information being disclosed, or (iii) any other disclosure
authorized by
the Depositor.
Within 70 days of the Closing Date, the Trustee (or the Custodian
on its
behalf) shall deliver to the NIMs Insurer, the Depositor, the
Master Servicer
and each Servicer the Initial Certification, substantially in the
form of
Exhibit D attached hereto, evidencing the completeness of the
Mortgage Files,
with any exceptions noted thereto.
SECTION 2.03. Representations, Warranties and Covenants of the
Depositor
(a) The Depositor hereby represents and warrants to the Servicers,
the
Master Servicer, the Securities Administrator, the NIMs Insurer and
the Trustee
as follows, as of the date hereof:
(i) The Depositor is duly organized and is validly existing as
a
corporation in good standing under the laws of the State of
Delaware and
has
full power and authority (corporate and other) necessary to own or
hold
its
properties and to conduct its business as now conducted by it and
to
enter into and perform its obligations under this Agreement and the
Sale
Agreement.
(ii) The
Depositor has the full corporate power and authority to
execute, deliver and perform, and to enter into and consummate
the
transactions contemplated by, this Agreement and the Sale Agreement
and has
duly
authorized, by all necessary corporate action on its part, the
execution, delivery and performance of this Agreement and the
Sale
Agreement; and this Agreement and the Sale Agreement, assuming the
due
authorization, execution and delivery hereof by the other parties
hereto,
constitutes a legal, valid and binding obligation of the
Depositor,
enforceable against the Depositor in accordance with its terms,
subject, as
to
enforceability, to (i) bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting creditors' rights
generally and
(ii)
general principles of equity, regardless of whether enforcement
is
sought in a proceeding in equity or at law.
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(iii) The execution and delivery of this Agreement and the Sale
Agreement by the Depositor, the consummation of the
transactions
contemplated by this Agreement and the Sale Agreement, and the
fulfillment
of
or compliance with the terms hereof are in the ordinary course
of
business of the Depositor and will not (A) result in a material
breach of
any
term or provision of the charter or by-laws of the Depositor or
(B)
materially conflict with, result in a violation or acceleration of,
or
result in a material
default under, the terms of any other material
agreement or instrument to which the Depositor is a party or by
which it
may
be bound or (C) constitute a material violation of any statute,
order
or
regulation applicable to the Depositor of any court, regulatory
body,
administrative agency or governmental body having jurisdiction over
the
Depositor; and the Depositor is not in breach or violation of any
material
indenture or other material agreement or instrument, or in
violation of any
statute, order or regulation of any court, regulatory body,
administrative
agency or governmental body having jurisdiction over it which
breach or
violation may materially impair the Depositor's ability to perform
or meet
any
of its obligations under this Agreement.
(iv) No litigation is pending, or, to the best of the
Depositor's
knowledge, threatened, against the Depositor that would materially
and
adversely affect the execution, delivery or enforceability of
this
Agreement and the Sale Agreement or the ability of the Depositor to
perform
its
obligations under this Agreement and the Sale Agreement in
accordance
with
the terms hereof.
(v) No consent, approval, authorization or order of any court
or
governmental agency or body is required for the execution, delivery
and
performance by the Depositor of, or compliance by the Depositor
with, this
Agreement and the Sale Agreement or the consummation of the
transactions
contemplated hereby, or if any such consent, approval,
authorization or
order is required, the Depositor has obtained the same. The
Depositor
hereby represents and warrants to the Trustee with respect to each
Mortgage
Loan as of the Closing Date,
and following the transfer of the Mortgage
Loans to it by the Sponsor, the Depositor had good title to the
Mortgage
Loans and the Mortgage Notes were subject to no offsets, claims,
liens,
mortgage, pledge, charge, security interest, defenses or
counterclaims.
(b) The representations and warranties of each Transferor with
respect
to the related Mortgage Loans in the applicable Transfer Agreement,
which have
been assigned to the Trustee hereunder, were made as of the date
specified in
the applicable Transfer Agreement and brought forward to the
Closing Date
pursuant to the related Bring Down Letter. The representations and
warranties of
each Transferor with respect to the Mortgage Loans contained in the
Bring Down
Letter were made as of the Closing Date. The representations and
warranties of
the Sponsor with respect to the Mortgage Loans contained in the
Sale Agreement
were made as of the Closing Date. To the extent that any fact,
condition or
event with respect to a Mortgage Loan constitutes a breach of (i)
both
representation or warranty of the applicable Transferor under the
applicable
Transfer Agreements or Bring Down Letters and (ii) a representation
or warranty
of the Sponsor under the Sale Agreement, the obligations of the
Sponsor under
the Sale Agreement shall be enforced against the Transferor or the
Sponsor, as
applicable, as set forth in the Sale Agreement. The Trustee is
hereby directed
to and does acknowledge that the Sponsor shall have no obligation
or liability
with respect to any breach of a representation or warranty made by
it with
respect to any related Mortgage Loans, except as otherwise set
forth in the Sale
Agreement, if (as certified to the Trustee by the Sponsor) the
fact, condition
or event constituting such breach also constitutes a breach of a
representation
or warranty made by the related Transferor in the related Transfer
Agreement or
Bring Down Letter, without regard to whether the related Transferor
fulfills its
contractual obligations in respect of such representation or
warranty. The
Trustee also is hereby directed to and does acknowledge that the
Sponsor shall
have no obligation or liability with respect to any breach of a
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representation or warranty made solely by the Transferors with
respect to the
Mortgage Loans, without regard to whether the related Transferor
fulfills its
contractual obligations in respect of such representation or
warranty. The
Trustee further acknowledges that the Depositor shall have no
obligation or
liability with respect to any breach of any representation or
warranty with
respect to the Mortgage Loans (except as set forth in Section
2.03(a)(iv)) under
any circumstances.
In
addition to the representations and warranties of the Transferors
in the
Transfer Agreements that were brought forward to the Closing Date
pursuant to
the related Bring Down Letter, with respect to each Mortgage Loan,
each
Transferor made certain additional covenants regarding such
Mortgage Loan, as
set forth in the related Transfer Agreement. With respect to any
breach of such
additional covenants that materially and adversely affects the
interests of the
Certificateholders in such Mortgage Loan, the Sponsor shall (1) use
reasonable
efforts to enforce such covenant against the related Transferor and
(2) if the
Sponsor successfully enforces any obligation of the related
Transferor to
repurchase such Mortgage Loan, the Sponsor shall repurchase such
Mortgage Loan
in accordance with this Section 2.03. If the Sponsor does not
successfully
enforce the obligation, if any, of the Transferor to repurchase a
Mortgage Loan
with respect to any breach of any such additional covenants, the
Sponsor shall
have no obligation or right to repurchase or cure such Mortgage
Loan.
(c) Upon discovery by any of the NIMs Insurer, the Master
Servicer,
the Securities Administrator, the Depositor, the Servicers or the
Trustee of a
breach of any of such representations and warranties that adversely
and
materially affects the value of the related Mortgage Loan,
Prepayment Charges or
the interests of the Certificateholders, the party discovering such
breach shall
give prompt written notice to the other parties. Within 90 days of
the discovery
of such breach of any representation or warranty, the applicable
Transferor or
the Sponsor, as applicable, shall either (a) cure such breach in
all material
respects, (b) repurchase such Mortgage Loan or any property
acquired in respect
thereof from the Trustee at the Purchase Price or (c) within the
two year period
following the Closing Date, substitute a Replacement Mortgage Loan
for the
affected Mortgage Loan. In the event of discovery of a breach of
any
representation and warranty of any Transferor or the Sponsor, the
Trustee's
rights shall be enforced under applicable Transfer Agreement and
the Sale
Agreement for the benefit of Certificateholders and the NIMs
Insurer. If a
breach of the representations and warranties set forth in a
Transfer Agreement
hereof exists solely due to the unenforceability of a Prepayment
Charge, the
Trustee (if it has had actual notice thereof) or the other party
having notice
thereof shall notify the related Servicer thereof and not seek to
enforce the
repurchase remedy provided for herein unless such Mortgage Loan is
not current.
In the event of a breach of the representations and warranties with
respect to
the Mortgage Loans set forth in the Transfer Agreement, the Trustee
shall use
reasonable efforts to enforce the right of the Issuing Entity to be
indemnified
for such breach of representation and warranty. In the event that
such breach
relates solely to the unenforceability of a Prepayment Charge,
amounts received
in respect of such indemnity up to the amount of such Prepayment
Charge shall be
distributed pursuant to Section 4.04(b)(i). As provided in the Sale
Agreement,
if the Sponsor substitutes for a Mortgage Loan for which there is a
breach of
any representations and warranties in the related Transfer
Agreement which
adversely and materially affects the value of such Mortgage Loan
and such
substitute mortgage loan is not a Replacement Mortgage Loan, under
the terms of
the Sale Agreement, the Sponsor will, in exchange for such
substitute Mortgage
Loan, (i) provide the applicable Purchase Price for the affected
Mortgage Loan
or (ii) within two years of the Closing Date, substitute such
affected Mortgage
Loan with a Replacement Mortgage Loan. Any such substitution shall
not be
effected prior to the additional delivery to the Trustee or the
Custodian on its
behalf of a Request for Release substantially in the form of
Exhibit I and shall
not be effected unless it is within two years of the Startup Day.
The Sponsor
indemnifies and holds the Issuing Entity, the Trustee, the
Depositor, the
Servicers, the NIMs Insurer, the Master Servicer, the Securities
Administrator
and each Certificateholder harmless against any and all taxes,
claims, losses,
penalties, fines, forfeitures, reasonable legal fees and related
costs,
judgments, and any other costs, fees and expenses that the Issuing
Entity, the
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Trustee, the Depositor, the Servicers, the NIMs Insurer, the Master
Servicer,
the Securities Administrator and any Certificateholder may sustain
in connection
with any actions of the Sponsor relating to a repurchase of a
Mortgage Loan
other than in compliance with the terms of this Section 2.03 and
the Sale
Agreement, to the extent that any such action causes (i) any
federal or state
tax to be imposed on the Issuing Entity or any REMIC provided for
herein,
including without limitation, any federal tax imposed on
"prohibited
transactions" under Section 860F(a)(1) of the Code or on
"contributions after
the startup day" under Section 860G(d)(1) of the Code, or (ii) any
REMIC created
hereunder to fail to qualify as a REMIC at any time that any
Certificate is
outstanding. In furtherance of the foregoing, if the Transferor or
the Sponsor,
as applicable, is not a member of MERS and repurchases a Mortgage
Loan which is
registered on the MERS System, the Transferor or the Sponsor, as
applicable, at
its own expense and without any right of reimbursement, shall cause
MERS to
execute and deliver an assignment of the Mortgage in recordable
form to transfer
the Mortgage from MERS to the Transferor or the Sponsor, as
applicable, and
shall cause such Mortgage to be removed from registration on the
MERS System in
accordance with MERS' rules and regulations.
With
respect to any Mortgage Loan repurchased by the Sponsor pursuant
to
the Sale Agreement, or by any Transferor pursuant to the applicable
Transfer
Agreement, the principal portion of the funds received by the
related Servicer
in respect of such repurchase of a Mortgage Loan will be considered
a Principal
Prepayment and shall be deposited in the related Collection Account
pursuant to
Section 3.05. Upon receipt by the Trustee or the Custodian on its
behalf, upon
receipt of notice from the related Servicer of receipt by the
related Servicer
of the full amount of the Purchase Price for a Deleted Mortgage
Loan, and upon
receipt of the Mortgage File for a Replacement Mortgage Loan
substituted for a
Deleted Mortgage Loan, shall release and reassign to the Sponsor or
the
applicable Transferor, as applicable, the related Mortgage File for
the Deleted
Mortgage Loan and shall execute and deliver such instruments of
transfer or
assignment, in each case without recourse, representation or
warranty, as shall
be necessary to vest in such party or its designee or assignee
title to any
Deleted Mortgage Loan released pursuant hereto, free and clear of
all security
interests, liens and other encumbrances created by this Agreement,
which
instruments shall be prepared by the applicable Transferor, and
neither the
Trustee, the Custodian on its behalf nor the Securities
Administrator shall have
any further responsibility with respect to the Mortgage File
relating to such
Deleted Mortgage Loan.
With
respect to each Replacement Mortgage Loan to be delivered to
the
Trustee (or the Custodian on its behalf) pursuant to the terms of
this Article
II in exchange for a Deleted Mortgage Loan: (i) the applicable
Transferor or the
Sponsor, as applicable, must deliver to the Trustee (or the
Custodian on its
behalf) the Mortgage File for the Replacement Mortgage Loan
containing the
documents set forth in Section 2.01 along with a written
certification
certifying as to the Mortgage Loan satisfying all requirements
under the
definition of Replacement Mortgage Loan and the delivery of such
Mortgage File
and containing the granting language set forth in Section 2.01; and
(ii) the
Depositor will be deemed to have made, with respect to such
Replacement Mortgage
Loan, each of the representations and warranties made by it with
respect to the
related Deleted Mortgage Loan. The Trustee (or the Custodian on its
behalf)
shall review the Mortgage File with respect to each Replacement
Mortgage Loan
and certify to the Depositor that all documents required by Section
2.01(A)-(B),
(C) (if applicable), and (D)-(E) have been executed and
received.
For
any month in which the Sponsor substitutes one or more
Replacement
Mortgage Loans for one or more Deleted Mortgage Loans, the Sponsor
will
determine the amount (if any) by which the aggregate principal
balance of all
such Replacement Mortgage Loans as of the date of substitution and
the aggregate
Prepayment Charges with respect to such Replacement Mortgage Loans
is less than
the aggregate Stated Principal Balance (after application of the
principal
portion of the Scheduled Payment due in the month of substitution)
and aggregate
Prepayment Charges of all such Deleted Mortgage Loans.
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An amount equal to the aggregate of the deficiencies described in
the preceding
sentence (such amount, the "Substitution Adjustment Amount") plus
an amount
equal to any unreimbursed costs, penalties and/or damages incurred
by the
Issuing Entity in connection with any violation relating to such
Deleted
Mortgage Loan of any predatory or abusive lending law shall be
remitted by the
Sponsor to the related Servicer for deposit into the related
Collection Account
by the Sponsor on the Determination Date for the Distribution Date
relating to
the Prepayment Period during which the related Mortgage Loan became
required to
be purchased or replaced hereunder.
Notwithstanding any other provision of this Agreement, the right
to
substitute Mortgage Loans pursuant to this Article II shall be
subject to the
additional limitations that no substitution of a Replacement
Mortgage Loan for a
Deleted Mortgage Loan shall be made unless the Trustee, the
Securities
Administrator and the NIMs Insurer shall each have received an
Opinion of
Counsel (at the expense of the party seeking to make the
substitution) that,
under current law, such substitution will not (A) affect adversely
the status of
any REMIC established hereunder as a REMIC, or of the related
"regular
interests" as "regular interests" in any such REMIC, or (B) cause
any such REMIC
to engage in a "prohibited transaction" or prohibited contribution
pursuant to
the REMIC Provisions.
The
Depositor shall amend the Mortgage Loan Schedule to reflect the
removal
of such Deleted Mortgage Loan from the terms of this Agreement and
the
substitution of the Replacement Mortgage Loan or Replacement
Mortgage Loans and
shall deliver a copy of such amended Mortgage Loan Schedule to the
NIMs Insurer,
the Servicers, the Master Servicer, the Securities Administrator
and the
Trustee. Upon such substitution by the Sponsor, such Replacement
Mortgage Loan
or Replacement Mortgage Loans shall constitute part of the Mortgage
Pool and
shall be subject in all respects to the terms of this Agreement and
the
applicable Sale Agreement, including all applicable representations
and
warranties thereof included in the applicable Sale Agreement as of
the date of
substitution.
(d) It is understood and agreed that the representations,
warranties
and indemnification (i) set forth in this Section 2.03, (ii) of the
Sponsor and
the Depositor set forth in the Sale Agreement and assigned to the
Trustee by the
Depositor hereunder and (iii) of each Transferor, assigned by the
Sponsor to the
Depositor pursuant to the Sale Agreement and assigned to the
Trustee by the
Depositor hereunder shall each survive delivery of the Mortgage
Files and the
Assignment of Mortgage of each Mortgage Loan to the Trustee or the
Custodian on
its behalf and shall continue throughout the term of this
Agreement.
(e) The Depositor shall deliver a copy of the Mortgage Loan
Schedule
to the related Servicer on the Closing Date.
(f) The Depositor shall notify the Servicers, the Master Servicer,
the
Securities Administrator and the Trustee when any NIM Notes are
issued and when
such NIM Notes are no longer outstanding.
SECTION 2.04. Representations and Warranties of the Master
Servicer; the
Servicers; the Securities Administrator;
(a) The Master Servicer hereby represents and warrants to the
Depositor, the Servicers, and the Trustee as follows, as of the
date hereof:
(i) The Master Servicer is duly organized and is validly existing
as a
national banking association and is duly authorized and qualified
to
transact any and all business contemplated by this Agreement to
be
conducted by the Master Servicer.
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(ii) The Master Servicer has the power and authority to master
service
each
Mortgage Loan, and to execute, deliver and perform, and to enter
into
and
consummate the transactions contemplated by this Agreement and has
duly
authorized by all necessary action on the part of the Master
Servicer the
execution, delivery and performance of this Agreement; and this
Agreement,
assuming the due authorization, execution and delivery hereof by
the other
parties hereto, constitutes a legal, valid and binding obligation
of the
Master Servicer, enforceable against the Master Servicer in
accordance with
its
terms, except that (a) the enforceability hereof may be limited
by
bankruptcy, insolvency, moratorium, receivership and other similar
laws
relating to creditors' rights generally and (b) the remedy of
specific
performance and injunctive and other forms of equitable relief may
be
subject to equitable defenses and to the discretion of the court
before
which any proceeding therefore may be brought.
(iii) The execution and delivery of this Agreement by the
Master
Servicer, the master servicing of the Mortgage Loans under this
Agreement,
the
consummation of any other of the transactions contemplated by
this
Agreement, and the fulfillment of or compliance with the terms
hereof are
in
the ordinary course of business of the Master Servicer and will not
(A)
result in a material breach of any term or provision of the charter
or
by-laws of the Master Servicer or (B) materially conflict with,
result in a
material breach, violation or acceleration of, or result in a
material
default under, the terms of any other material agreement or
instrument to
which the Master Servicer is a party or by which it may be bound,
or (C)
constitute a material violation of any statute, order or
regulation
applicable to the Master Servicer of any court, regulatory
body,
administrative agency or governmental body having jurisdiction over
the
Master Servicer; and the Master Servicer is not in breach or
violation of
any
material indenture or other material agreement or instrument, or
in
violation of any statute, order or regulation of any court,
regulatory
body, administrative agency or governmental body having
jurisdiction over
it
which breach or violation may materially impair the Master
Servicer's
ability to perform or meet any of its obligations under this
Agreement..
(iv) No litigation is pending or, to the best of the Master
Servicer's
knowledge, threatened, against the Master Servicer that would
materially
and
adversely affect the execution, delivery or enforceability of
this
Agreement or its performance of any of its other obligations under
this
Agreement in accordance with the terms hereof. No consent,
approval,
authorization or order of any court or governmental agency or body
is
required for the execution, delivery and performance by the Master
Servicer
of,
or compliance by the Master Servicer with, this Agreement or
the
consummation of the transactions contemplated hereby, or if any
such
consent, approval, authorization or order is required, the Master
Servicer
has
obtained the same.
(v) No consent, approval, authorization or order of any court
or
governmental agency or body is required for the execution, delivery
and
performance by the Master Servicer of, or compliance by the Master
Servicer
with, this Agreement or the consummation of the transactions
contemplated
hereby, or if any such consent, approval, authorization or order
is
required, the Master Servicer has obtained the same.
(b) Wilshire hereby represents and warrants to the Depositor,
the
Master Servicer, the Securities Administrator, IndyMac and the
Trustee as
follows, as of the date hereof:
(i) Wilshire is duly organized and is validly existing as a
corporation in good standing under the laws of the State of Oregon
and is
duly
authorized and qualified to transact any and all business
contemplated
by
this Agreement to be conducted by Wilshire in any state in which
a
Mortgaged Property is located or is otherwise not required under
applicable
law
to effect
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such
qualification and, in any event, is in compliance with the
doing
business laws of any
such state, to the extent necessary to ensure its
ability to enforce each Mortgage Loan, to service the Mortgage
Loans in
accordance with the terms of this Agreement and to perform any of
its other
obligations under this Agreement in accordance with the terms
hereof.
(ii) Wilshire has the corporate power and authority to service
each
Mortgage Loan, and to execute, deliver and perform, and to enter
into and
consummate the transactions contemplated by this Agreement and has
duly
authorized by all necessary corporate action on the part of
Wilshire the
execution, delivery and performance of this Agreement; and this
Agreement,
assuming the due authorization, execution and delivery hereof by
the other
parties hereto, constitutes a legal, valid and binding obligation
of
Wilshire, enforceable against Wilshire in accordance with its
terms, except
that
(a) the enforceability hereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws
relating to
creditors' rights generally and (b) the remedy of specific
performance and
injunctive and other forms of equitable relief may be subject to
equitable
defenses and to the discretion of the court before which any
proceeding
therefore may be brought.
(iii) The execution and delivery of this Agreement by Wilshire,
the
servicing of the Mortgage Loans under this Agreement, the
consummation of
any
other of the transactions contemplated by this Agreement, and
the
fulfillment of or compliance with the terms hereof are in the
ordinary
course of business of Wilshire and will not (A) result in a
material breach
of
any term or provision of the charter or by-laws of Wilshire or
(B)
materially conflict with, result in a material breach, violation
or
acceleration of, or result in a material default under, the terms
of any
other material agreement or instrument to which Wilshire is a party
or by
which it may be bound, or (C) constitute a material violation of
any
statute, order or regulation applicable to Wilshire of any
court,
regulatory body, administrative agency or governmental body
having
jurisdiction over Wilshire; and Wilshire is not in breach or
violation of
any
material indenture or other material agreement or instrument, or
in
violation of any statute, order or regulation of any court,
regulatory
body, administrative agency or governmental body having
jurisdiction over
it
which breach or violation may materially impair the Wilshire's
ability
to
perform or meet any of its obligations under this Agreement.
(iv) Wilshire is an approved servicer of mortgage loans for Fannie
Mae
and
is an approved servicer of mortgage loans for Freddie Mac.
(v) No litigation is pending or, to the best of Wilshire's
knowledge,
threatened, against Wilshire that would materially and adversely
affect the
execution, delivery or enforceability of this Agreement or the
ability of
Wilshire to service the Mortgage Loans or to perform any of its
other
obligations under this Agreement in accordance with the terms
hereof.
(vi) No consent, approval, authorization or order of any court
or
governmental agency or body is required for the execution, delivery
and
performance by Wilshire of, or compliance by Wilshire with, this
Agreement
or
the consummation of the transactions contemplated hereby, or if any
such
consent, approval, authorization or order is required, Wilshire
has
obtained the same.
(vii) Wilshire has fully furnished and will fully furnish (for
the
period it serviced the Mortgage Loans), in accordance with the Fair
Credit
Reporting Act and its implementing regulations, accurate and
complete
information (e.g., favorable and unfavorable) on its borrower
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credit files to Equifax, Experian and Trans Union Credit
Information
Company on a monthly basis.
(c) IndyMac hereby represents and warrants to the Depositor,
the
Master Servicer, the Securities Administrator, Wilshire and the
Trustee as
follows, as of the date hereof:
(i) IndyMac is duly organized and is validly existing as a
national
banking association and is duly authorized and qualified to
transact any
and
all business contemplated by this Agreement to be conducted by
IndyMac
in
any state in which a Mortgaged Property is located or is otherwise
not
required under applicable law to effect such qualification and, in
any
event, is in compliance with the doing business laws of any such
state, to
the
extent necessary to ensure its ability to enforce each Mortgage
Loan,
to
service the Mortgage Loans in accordance with the terms of this
Agreement and to perform any of its other obligations under this
Agreement
in
accordance with the terms hereof.
(ii) IndyMac has the power and authority to service each
Mortgage
Loan, and to execute, deliver and perform, and to enter into and
consummate
the
transactions contemplated by this Agreement and has duly authorized
by
all
necessary corporate action on the part of IndyMac the
execution,
delivery and performance of
this Agreement; and this Agreement, assuming
the
due authorization, execution and delivery hereof by the other
parties
hereto, constitutes a legal, valid and binding obligation of
IndyMac,
enforceable against IndyMac in accordance with its terms, except
that (a)
the
enforceability hereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to
creditors'
rights generally and (b) the remedy of specific performance and
injunctive
and
other forms of equitable relief may be subject to equitable
defenses
and
to the discretion of the court before which any proceeding
therefore
may
be brought.
(iii) The execution and delivery of this Agreement by IndyMac,
the
servicing of the Mortgage Loans under this Agreement, the
consummation of
any
other of the transactions contemplated by this Agreement, and
the
fulfillment of or compliance with the terms hereof are in the
ordinary
course of business of
IndyMac and will not (A) result in a material breach
of
any term or provision of the charter or by-laws of IndyMac or
(B)
materially conflict with, result in a material breach, violation
or
acceleration of, or result in a material default under, the terms
of any
other material agreement or instrument to which IndyMac is a party
or by
which it may be bound, or (C) constitute a material violation of
any
statute, order or regulation applicable to IndyMac of any court,
regulatory
body, administrative agency or governmental body having
jurisdiction over
IndyMac; and IndyMac is not in breach or violation of any
material
indenture or other material agreement or instrument, or in
violation of any
statute, order or regulation of any court, regulatory body,
administrative
agency or governmental body having jurisdiction over it which
breach or
violation may materially impair the IndyMac's ability to perform or
meet
any
of its obligations under this Agreement.
(iv) IndyMac is an approved servicer of mortgage loans for Fannie
Mae
and
is an approved servicer of mortgage loans for Freddie Mac.
(v) No litigation is pending or, to the best of IndyMac's
knowledge,
threatened, against IndyMac that would materially and adversely
affect the
execution, delivery or enforceability of this Agreement or the
ability of
IndyMac to service the Mortgage Loans or to perform any of its
other
obligations under this Agreement in accordance with the terms
hereof.
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<PAGE>
(vi) No consent, approval, authorization or order of any court
or
governmental agency or body is required for the execution, delivery
and
performance by IndyMac of, or compliance by IndyMac with, this
Agreement or
the
consummation of the transactions contemplated hereby, or if any
such
consent, approval, authorization or order is required, IndyMac has
obtained
the
same.
(vii) IndyMac has fully furnished and will fully furnish (for
the
period it serviced the Mortgage Loans), in accordance with the Fair
Credit
Reporting Act and its implementing regulations, accurate and
complete
information (e.g., favorable and unfavorable) on its borrower
credit files
to
Equifax, Experian and Trans Union Credit Information Company on
a
monthly basis.
(d) The Securities Administrator hereby represents and warrants to
the
Depositor, the Servicers and the Trustee as of the date hereof:
(i) The Securities Administrator is duly organized and is
validly
existing as a national banking association and is duly authorized
and
qualified to transact any and all business contemplated by this
Agreement
to
be conducted by the Securities Administrator
(ii) The Securities Administrator has the full corporate power
and
authority to execute, deliver and perform, and to enter into
and
consummate, the transactions contemplated by this Agreement and has
duly
authorized by all necessary corporate action on the part of the
Securities
Administrator the execution, delivery and performance of this
Agreement;
and
this Agreement, assuming the due authorization, execution and
delivery
hereof by the other parties hereto, constitutes a legal, valid and
binding
obligation of the Securities Administrator, enforceable against
the
Securities Administrator in accordance with its terms, except that
(a) the
enforceability hereof may be limited by bankruptcy, insolvency,
moratorium,
receivership and other similar laws relating to creditors' rights
generally
and
(b) the remedy of specific performance and injunctive and other
forms
of
equitable relief may be subject to equitable defenses and to
the
discretion of the court before which any proceeding hereunder may
be
brought.
(iii) The execution and delivery of this Agreement by the
Securities
Administrator, the consummation of any other of the
transactions
contemplated by this Agreement, and the fulfillment of or
compliance with
the
terms hereof are in the ordinary course of business of the
Securities
Administrator and will not (A) result in a material breach of any
term or
provision of the charter or by-laws of the Securities Administrator
or (B)
materially conflict with, result in a material breach, violation
or
acceleration of, or result in a material default under, the terms
of any
other material agreement or
instrument to which the Securities
Administrator is a party or by which it may be bound, or (C)
constitute a
material violation of any statute, order or regulation applicable
to the
Securities Administrator of any court, regulatory body,
administrative
agency or governmental body having jurisdiction over the
Securities
Administrator; and the Securities Administrator is not in breach
or
violation of any material indenture or other material agreement
or
instrument, or in violation of any statute, order or regulation of
any
court, regulatory body, administrative agency or governmental body
having
jurisdiction over it which breach or violation may materially
impair the
Securities Administrator's ability to perform or meet any of
its
obligations under this Agreement.
(iv) No litigation is pending or, to the best of the Securities
Administrator's knowledge, threatened, against the Securities
Administrator
that
would materially and adversely
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<PAGE>
affect the execution, delivery or enforceability of this Agreement
or the
ability of the Securities Administrator to perform any of its
other
obligations under this Agreement in accordance with the terms
hereof.
(v) No consent, approval, authorization or order of any court
or
governmental agency or body is required for the execution, delivery
and
performance by the Securities Administrator of, or compliance by
the
Securities Administrator with, this Agreement or the consummation
of the
transactions contemplated hereby, or if any such consent,
approval,
authorization or order is required, the Securities Administrator
has
obtained the same.
SECTION 2.05. Substitutions and Repurchases of Mortgage Loans that
are not
"Qualified Mortgages"
Upon
discovery by the Depositor, the Master Servicer, the Securities
Administrator, either Servicer or the Trustee that any Mortgage
Loan does not
constitute a "qualified mortgage" within the meaning of section
860G(a)(3) of
the Code, the party discovering such fact shall promptly (and in
any event
within five Business Days of discovery) give written notice thereof
to the other
parties. In connection therewith, the Depositor shall, at the
Depositor's
option, either (i) substitute, if the conditions in Section 2.03(c)
with respect
to substitutions are satisfied, a Replacement Mortgage Loan for the
affected
Mortgage Loan, or (ii) repurchase the affected Mortgage Loan within
90 days of
such discovery in the same manner as it would a Mortgage Loan for a
breach of
representation or warranty contained in Section 2.03. The Trustee,
or the
Custodian on its behalf upon the written direction of the
Depositor, shall
reconvey to the Depositor the Mortgage Loan to be released pursuant
hereto in
the same manner, and on the same terms and conditions, as it would
a Mortgage
Loan repurchased for breach of a representation or warranty
contained in Section
2.03.
SECTION 2.06. Authentication and Delivery of Certificates
The
Trustee acknowledges the transfer and assignment to it of the
Trust
Fund and, concurrently with such transfer and assignment, the
Securities
Administrator has caused to be authenticated and delivered to or
upon the order
of the Depositor, in exchange for the Mortgage Loans, Certificates
duly
authenticated by the Securities Administrator in authorized
denominations
evidencing ownership of the entire Trust Fund. The Tr
